Derivative actions brought by LLC members take the spotlight for the second week in a row, this time featuring a pair of noteworthy decisions involving Delaware and Nevada LLCs in which the defendants argued that the plaintiff’s right to sue derivatively was waived by the operating agreement. Learn more in this week’s New York Business Divorce.
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The implied covenant of good faith and fair dealing continues to sow confusion as to its utility and application in disputes among business co-owners, in which often it is misconceived as a quasi-fiduciary claim invoking the court’s equity powers to right any wrong, when in fact it is a narrow, contract-based doctrine. A recent Delaware Chancery Court decision provides a highly useful guide, as explained in this week’s New York Business Divorce.
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The Appellate Division, Second Department last week decided a trio of appeals in related cases concerning the consequences of an LLC member’s withdrawal, holding that the member was not entitled to a fair-value buyout and that upon withdrawal he lost standing to maintain derivative claims. Read all about it in this week’s New York Business Divorce.
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After more than two years in receivership, an appeals court gives a dissolved LLC a new lease on life because the petitioners “offered no competent evidentiary proof” why the entity should have been dissolved. We take a closer look in this week’s New York Business Divorce.
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Is a “Management Member” of an LLC, who holds only an economic interest, a “Member” for purposes of demanding access to the LLC’s books and records? Justice Shirley Werner Kornreich, applying Delaware law, closely examined the operating agreement in upholding inspection rights, as explained in this week’s New York Business Divorce.
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A minority member of an LLC that operates a Manhattan restaurant learned how tough it can be to get judicial dissolution of a financially sound LLC that’s achieving its intended purpose, notwithstanding allegations of majority oppression. It’s in this week’s New York Business Divorce.
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Did the Appellate Division, Second Department, throw us a curve ball in its decision last week in Mace v. Tunick, reinstating an LLC dissolution complaint based on its finding that the operating agreement’s purpose clause, authorizing the LLC to engage in “any lawful business,” did not set forth “any particular purpose”? Learn more about this important development in this week’s New York Business Divorce.
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