DELAWARE CORPORATE CASE RELEVANT TO LLCS

By , November 14, 2018 11:11 am

The controlling members of LLCs often want to obtain waivers from minority members of their statutory appraisal rights.  Under the link below is a useful post about a recent Delaware case addressing the validity of these waivers under Delaware corporate law; but the reasoning and holding in the case is readily applicable to LLCs—and not only in Delaware but also, I suspect, in many other states.

Here’s the link:  https://www.pepperlaw.com/publications/contractual-waivers-of-appraisal-rights-declared-valid-under-delaware-law-2018-10-05/

NON-UNANIMOUS AMENDMENTS OF OPERATING AGREEMENTS

By , November 5, 2018 12:44 pm

This post by Peter Mahler in his great weekly blawg entitled “Business Divorce” addresses the issue—which arises all too often—of non-unanimous amendments of LLC operating agreements vs. the fiduciary duties of those signing the amendments towards those not signing them.

Here’s the link to Peter’s post:  https://www.nybusinessdivorce.com/2018/10/articles/operating-agreement/decision-put-brakes-non-unanimous-amendments-operating-agreements/

LLC MANAGER SEEKS TO SUE HIS LLC’S LAW FIRM FOR MALPRACTICE

By , November 2, 2018 8:09 am

LLC managers who want to sue their LLC’s law firm for malpractice, and the LLCs and members, should first read the following case:

Reynolds v. Henderson & Lyman et al., No. 17-1999, 2018 WL 4348013 (7th Cir. Sept. 12, 2018).  The basic lesson:  Manager can’t sue on his own behalf unless the LLC’s law firm is also the manager’s law firm.

EMPLOYMENT TAXES

By , October 30, 2018 8:22 am

If you feel you can use a refresher about the federal tax law governing employment taxes, they’re nicely reviewed in a very recent decision of the Eighth Circuit federal court of appeals.  For a useful discussion of the decision by Lou Vlahos of the firm of FarrellFritz, click on the link below.

http://media.ca8.uscourts.gov/opndir/18/09/172326P.pdf

CONTRACTARIANISM UNDER THE DELAWARE LLC ACT

By , October 25, 2018 9:55 am

In A&J Capital, Inc. v. Law Office of Krug, C.A. No. 2018-0240-JRS (July 18, 2018),  the Delaware Court of Chancery once again emphasized the profoundly contractarian nature of Delaware LLC law and explained the meaning and implication of Delaware LLC contractarianism in substantial detail.  For an excellent summary of the case, click here:

https://www.klgatesdelawaredocket.com/2018/09/chancery-court-enforces-llc-agreement-further-demonstrating-that-llcs-are-creatures-of-contract/

FIDUCIARY DUTIES OF INACTIVE LLC MEMBERS

By , October 23, 2018 9:12 am

Under the link below is a new post from Peter Mahler about an October 5 NY decision about whether inactive members of LLCs have LLC fiduciary duties.  The issue is of obvious importance in all U.S. jurisdictions.

Here’s the link:  https://www.nybusinessdivorce.com/2018/10/articles/operating-agreement/inactive-member-member-managed-llc-owe-fiduciary-duties/

TAX CHANGES MAY AFFECT BOTTOM LINE OF MANY BUSINESS OWNERS

By , October 18, 2018 9:23 am

The IRS has just issued a brief summary of the most important impacts of the Tax Cuts and Jobs Act of 2017 on small businesses.  These impacts will, of course, effect many millions of LLCs.  The link to the IRS statement is https://www.irs.gov/newsroom/irs-several-tax-law-changes-may-affect-bottom-line-of-many-business-owners

INNOVATIVE NEW ARIZONA LLC ACT

By , October 16, 2018 9:07 am

The post under the link below provides an excellent introduction to Arizona’s new LLC Act.  That Act is based on the Revised Uniform Limited Liability Company Act, but it also has a number of unique provisions.  The post will be of particular interest, of course, to Arizona lawyers, but also to lawyers in other states who have a general interest in LLC statutory law.

Here’s the link:  : https://www.lexology.com/r.ashx?l=84MMDFH

WEAPONIZED LLCS

By , October 9, 2018 12:38 pm

Under the link below is a post by Peter Mahler, the world’s expert (in my opinion) on disputes among LLC members and managers.  His post is about a “weaponized” LLC—i.e., one in which the majority have very substantial rights vis a vis the minority under the governing operating agreement.  In my experience, “weaponized” LLCs are common; I’ve formed more than a couple myself.

Here’s the link:  https://www.nybusinessdivorce.com/2018/09/articles/capital-call/judicial-dissolution-weaponized-llc/

EXPELLING LLC MEMBERS

By , October 4, 2018 1:16 pm

If your state’s LLC act provides members with the right to expel other members (as, for example, New Hampshire’s does under RSA 304-C:104), you can skip the post by Peter Mahler under the link below.  But if it doesn’t, you’d better read his post!

Here’s the link:

https://www.nybusinessdivorce.com/2018/09/articles/expulsion-and-removal/repeat-may-not-expel-member-new-york-llc-unless-operating-agreement-says/