News & Analysis as of

Operating Agreements Motion to Dismiss Breach of Duty

Farrell Fritz, P.C.

The Humble LLC Exculpation Clause Wins Big: Member/CEO Escapes $8M Fiduciary Claims

Farrell Fritz, P.C. on

It’s difficult to assess the potency of section 417(a) of New York’s LLC law.  The provision starts off with a seemingly broad rule: “The operating agreement may set forth a provision eliminating or limiting the personal...more

Winstead PC

Business Divorce: Exiting Member of LLC May Still Owe Fiduciary Duties

Winstead PC on

In Villareal v. Saenz, two co-owners of a limited liability company sued each other regarding conduct surrounding a business divorce. 5-20-CV-00571-OLG-RBF, 2021 U.S. Dist. LEXIS 94183 (W.D. Tex. May 18, 2021)....more

Gray Reed

Minority Members’ Contractual Blocking Rights Can Result in the Imposition of Fiduciary Duties

Gray Reed on

In Skye Mineral Investors LLC v. DXS Capital (U.S.) Limited, et al., the Delaware Court of Chancery (the “Court”) denied defendants’ motion to dismiss, finding that plaintiffs had sufficiently pled a breach by the members...more

Patterson Belknap Webb & Tyler LLP

Commercial Division Holds That Fiduciary Duties Limit LLC Majority Members’ Ability to Adopt Amendments Aimed at Freezing Out...

Many LLC operating agreements expressly require the consent of all members to adopt or amend the operating agreement. However, some LLC operating agreements do not contain such a provision, and instead simply require the...more

Farrell Fritz, P.C.

Does This Decision Put the Brakes on Non-Unanimous Amendments to Operating Agreements?

Farrell Fritz, P.C. on

Much digital ink has been spilled on this blog and elsewhere (Tom Rutledge’s terrific article can be read) concerning the ability of LLC controllers to adopt or amend an operating agreement without the consent of all members....more

Farrell Fritz, P.C.

LLC’s Purpose Being Achieved? Business Doing Fine? Good Luck Getting Judicial Dissolution

Farrell Fritz, P.C. on

New York’s LLC judicial dissolution statute, Section 702 of the Limited Liability Company Law, provides far more limited grounds to dissolve a business than the Business Corporation Law – a harsh reality for allegedly...more

Patterson Belknap Webb & Tyler LLP

Commercial Division Flags Novel Issue of Reasonable Reliance In LLC Member Battle

In PMC Aviation 2012-1 LLC et al. v. Jet Midwest Group, LLC et al., No. 654047/2015, BL221447 (Sup. Ct. Jun. 21, 2017), Commercial Division Justice Shirley Kornreich denied a motion to dismiss a fraudulent inducement claim by...more

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