MASSACHUSETTS LLC CASE

By , August 24, 2018 10:42 am

The case cited and summarized below obviously has critical importance for lawyers representing Massachusetts LLC, but it may also have an impact in other jurisdictions.  Here are the cite and the summary:

62-WTR B. B.J. 9
Boston Bar Journal
Winter, 2018
Case Focus
Michael Cohen William Cushing
Copyright © 2018 by Boston Bar Association; Michael Cohen, William Cushing
MASSACHUSETTS APPEALS COURT PERMITS CLAIM FOR BREACH OF FIDUCIARY DUTIES AGAINST COMPANY COUNSEL BY MINORITY LLCMEMBERS

In Baker v. Wilmer Cutler Pickering Hale and Dorr LLP, 91 Mass. App. Ct. 835 (2017), decided this past July, the Massachusetts Appeals Court allowed the minority members of a Massachusetts limited liability company to sue the LLC’s outside counsel for breach of fiduciary duty relating to counsel’s involvement in an alleged “freeze-out” scheme that benefited the majority members. Although the Supreme Judicial Court had previously held that counsel to closely-held corporations may owe fiduciary duties to individual stockholders, Baker is the first case in which a Massachusetts appellate court has permitted a claim for breach of fiduciary duty to proceed against outside company counsel by minority owners. Corporate lawyers should be acutely aware of the Baker decision and its implications.

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