Episode 021: Member Liquidity, Default Rules, and the Corporate-ization of LLCs: A Conversation with Dean Donald J. Weidner
Episode 3: Professor Peter Molk Interview on Drafting Around LLC Default Rules
In a landmark decision with far-reaching implications for private equity-backed ventures and minority investors in Delaware limited liability companies, the Delaware Court of Chancery dismissed a lawsuit brought by former...more
In a recent decision, the Delaware Court of Chancery dismissed breach of fiduciary duty claims asserted by minority unitholders in connection with the acquisition of CityMD by VillageMD. In Kahn, et al. v. Warburg Pincus, et...more
Delaware permits the elimination of fiduciary duties in limited liability company agreements. Notwithstanding, and just like in any other contract, parties to a limited liability company agreement are still subject to the...more
A recent opinion from the Business Court of Texas, Eighth Division (Fort Worth), provides a crisp reminder that an LLC’s company agreement can all but eliminate fiduciary duties among its members and managers. In Tall v....more
Gibson v. Konick, C.A. No. 2022-1036-LWW (Del. Ch. July 10, 2024) - The Court of Chancery dissolved a single asset LLC even though the LLC agreement required a unanimous vote of the members to dissolve, and one of the two...more
McMillan v. Nelson, C.A. 2024-0016-KSJM (Del. Ch. July 5, 2024) - In a dispute over the management of Prince Legacy, LLC, an entity formed to manage assets from the estate of the late musician Prince, the Court of...more
Whether you are struggling with your current company structure that does not separate assets and liabilities between your different lines of business, or have multiple companies to do this for you, the Series LLC can offer...more
Soleimani v. Hakkak, C.A. No. 2023-0948-LWW (Del. Ch. Apr. 12, 2024) - The defendants attempted to remove a manager-employee of several limited liability companies. The manager filed suit, and the parties moved for summary...more
DiDonato v. Campus Eye Management, LLC, C.A. No. 2023-0671-LWW (Del. Ch. Jan. 31, 2024) - In governance disputes among LLC constituencies, the operating agreement is the beginning and often end point. This action involved...more
In Holifield v. XRI Investment Holdings LLC, No. 407, 2022 (Del. Sept. 7, 2023), the Delaware Supreme Court affirmed the lower court’s determination that the defendant violated XRI Investment Holdings’ LLC agreement when he...more
VH5 Capital, LLC v. Jeremiah Rabe, C.A. No. 2020-0315-NAC (Del. Ch. June 30, 2023) - The at-issue LLC had two members – the defendant and the plaintiff, both of whom also constituted the company's board. The company never...more
In the iconic “The Princess Bride,” Miracle Max observes that there is a big difference between “all dead” and “mostly dead” and then goes on to prove it. In Holifield v. XRI Investment LLC, 2023 WL 5761367 (Del. Supr. Sept....more
One feature commonly seen in commercial lending transactions is a waiver of the borrower’s authority to file for bankruptcy without the consent of the lender. While such “blocking” provisions are generally upheld where the...more
Folks hearing the phrase “business divorce” for the first time tend to focus unconsciously on the word “divorce,” tuning out the word “business.” The irony is that most business divorce cases have nothing to do with...more
Let’s see how good you are at predicting the outcome and its rationale in a recently decided case involving the following facts: The controller of a Delaware LLC has supermajority voting rights under the initial LLC...more
In XRI Investment Holdings LLC v. Holifield, C.A. No. 2021-0619-JTL, the Court of Chancery found that defendant Holifield violated a No Transfer Provision in the limited liability company agreement of XRI Investment Holdings...more
XRI Investment Holdings LLC v. Holifield, et al., C.A. No. 2021-0619-JTL (Del. Ch. Sept. 13, 2022) - Under precedents such as CompoSecure, L.L.C. v. CardUX, LLC (Del. 2018), acts defined by an LLC agreement as “void” or...more
W.D.C. Holdings, LLC v. IPI Partners, LLC, C.A. No. 2020-1026-JTL (Del. Ch. June 22, 2022) - Two entities entered into a joint venture to develop data centers for Amazon. One entity managed the joint venture day to day,...more
In CompoSecure v. CardUX, 206 A.3d 808 (Del. 2018), the Delaware Supreme Court held that when parties use the word “void” to describe the consequences of a noncompliant act under an LLC agreement, the act is deemed void ab...more
Many new businesses chose to establish limited liability companies (LLC) because of the protection from individual liability, the benefit of pass-through taxation, and the form’s inherent flexibility. Certain types of...more
One of the goals in a business divorce is finality – ending a business relationship once and for all. But what if the end isn’t really the end?...more
In re Dissolution of Jeffco Management, LLC, C.A. No. 2018-0027-PAF (Del. Ch. Aug. 16, 2021) - When the Court of Chancery appoints a receiver to effectuate a company’s dissolution, certain determinations are subject to de...more
In re Coinmint, LLC, C.A. No. 2019-0983-MTZ (Del. Ch. Aug. 12, 2021) - This decision illustrates that, in specific circumstances, the equitable defenses of waiver, acquiescence, and estoppel may preclude a party from...more
In Re Cadira Group Holdings, LLC Litigation, Consolidated C.A. No. 2018-0616-JRS (Del. Ch. July 12, 2021) - The Delaware Limited Liability Company Act provides that “the fiduciary duties of a member, manager, or other...more
The 2021 amendments to the Delaware General Corporation Law (the DGCL), the Delaware Revised Uniform Partnership Act (the DRUPA), the Delaware Revised Uniform Limited Partnership Act (the DRULPA), and the Delaware Limited...more