FIVE LLC CASES

By , May 18, 2017 10:59 am

Under the link below is a post by Peter Mahler from his Business Divorce website. The post cites and briefly discusses five recent non-NY LLC cases. All of these cases address issues of considerable interest not only to litigators but also to LLC formation lawyers.

Here’s the link:

http://www.nybusinessdivorce.com/2017/04/articles/foreign-business-entities/business-divorce-nation-five-states-five-cases/

SUMMARY OF CALIFORNIA EMPLOYMENT LAW

By , May 16, 2017 9:03 am

Under the link below is an excellent brief summary of California employment law:

http://www.lexology.com/library/detail.aspx?g=0060f328-d810-410d-8bee-121988385fe6&utm_source=Lexology+Daily+Newsfeed&utm_medium=HTML+email+-+Body+-+General+section&utm_campaign=Lexology+subscriber+daily+feed&utm_content=Lexology+Daily+Newsfeed+2017-04-06&utm_term=

RECENT ARTICLES ABOUT LLCS IN ABA BUSINESS LAW TODAY

By , May 15, 2017 12:47 pm

The  March 2017 issue of the ABA’s Business Law Today contains several important articles about LLC law and tax.  Here’s a link to the table of contents:

http://www.americanbar.org/publications/blt/2017/03.html

TWO BUSINESS DIVORCES

By , May 11, 2017 10:52 am

Both of the cases discussed in the post by Peter Mahler under the link below involve business disputes between brothers. As every LLC lawyer will know, business divorces between family members involve special horrors. In the first case, the first brother was unable to prove he was the second brother’s partner, and should have known he wasn’t. In the second, the brothers were partners but hated each other, and their partnership was dissolved because the brothers’ mutual hatred made it “not reasonably practicable to carry on the business [of the relevant LLC] in conformity with the operating agreement.”

Here is the link: http://www.nybusinessdivorce.com/2017/03/articles/family-owned-businesses/pair-unbrotherly-business-altercations-go-trial/#more-18898

S CORPORATION TAXATION

By , May 8, 2017 10:15 am

Many LLCs are taxable as S corporations, and far more should be.  The attached post under the link below addresses a couple of fundamental and pervasive S corporation issues about basis and losses.  The post applies, of course, as much to LLCs that are S corporations as to state-law business corporations that are S corporations.

Here is the link:   http://www.taxlawforchb.com/2017/05/s-corps-basis-loss-limitations/

DISCOUNTS FOR LACK OF MOBILITY (“DLOM”)

By , May 5, 2017 9:22 am

Estate planners and LLC lawyers interested in DLOM issues will find interest in the post from Peter Mahler under the link below, especially if they practice in New Jersey. Here’s the link:

http://www.nybusinessdivorce.com/2017/03/articles/valuation-discounts/new-jersey-gone-off-dlom-rocker/

WHAT EVERY BUSINESS OWNER SHOULD KNOW ABOUT PRIVATE FOUNDATIONS

By , May 3, 2017 8:46 am

The post under the link below provides basic information that business owners should know about private foundations.

Here’s the link: http://www.taxlawforchb.com/2017/04/private-foundations-a-primer-for-the-business-owner/

LOVE VS. BUSINESS

By , May 1, 2017 10:06 am

Below is a link to the a post in Peter Mahler’s outstanding blog about business divorce. Immediately below, in quotes, is the first paragraph of the post.

“When a romantic affair evolves into a business relationship, the eventual falling out can be especially messy. Even more so if the former lovers try to keep the business going after the romance ends. That is a theme from a recent post-trial decision by Queens County Justice Timothy J. Dufficy in Shih v Kim, 2017 NY Slip Op 50281(U) [Sup Ct Queens County Mar. 2, 2017].”

Here’s the link: http://www.nybusinessdivorce.com/2017/03/articles/derivative-actions/love-business-fails/

IMPLIED COVENANT

By , April 28, 2017 9:19 am

Lawyer shouldn’t draft operating agreements for multi-member LLCs unless they have a solid understanding of the implied contractual covenant of good faith and fair dealing. Below are a cite and the first paragraph of a good new article on the implied contractual covenant of good faith and fair dealing.

58 B.C. L. Rev. E-Supplement 1
Boston College Law Review E-Supplement
2017
Essay
LEAP OF FAITH: DETERMINING THE STANDARD OF FAITH NEEDED TO VIOLATE THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING FOR DELAWARE LIMITED LIABILITY COMPANIES
Pat Andriola
Copyright: 2016 by Pat Andriola. All rights reserved.

Abstract: Delaware courts have long respected the right to contract in Delaware, and possibly no entity is afforded more privileges to set the boundaries of its corporate form than the Delaware Limited Liability Company. Unlike nearly every other state, Delaware permits LLCs to abolish the duties of care and loyalty in their operating agreements, but forbids companies to eliminate liability for “any act or omission that constitutes a bad faith violation of the implied contractual covenant of good faith and fair dealing.” The problem with the phrase “bad faith violation” is that, when referencing a breach of the implied covenant of good faith and fair dealing, it implies that there exists a non-bad faith violation of the covenant. In determining whether or not “neutral faith” or “non-bad faith” violations of the implied covenant are permissible under Delaware LLC law, this essay argues that Delaware courts should look to the relatively short history of the covenant, the contractarian spirit of Delaware laws and courts, and section 18-1101 of the Delaware Limited Liability Company Act to hold that the implied covenant can only be violated in bad faith.

MANAGER NEGLIGENCE

By , April 25, 2017 9:30 am

The link below is a post about a Seventh Circuit case about a supreme example of Home Depot management negligence in hiring and supervising a manager–who ended up murdering one of the Home Depot female employees who reported to him. When you teach LLC formation clients about how to avoid veil-piercing (which you should do in every LLC formation you handle), you should tell them that their LLC may be liable for misconduct of its employees even if the misconduct has nothing to do with the LLC’s business. You might even want to tell them about the Home Depot case.

Here’s the link: http://www.employmentlawbusinessguide.com/2017/04/seventh-circuit-negligence -lawsuit-may-proceed-against-employer-regarding-supervisors-off-site-murder- of-female-subordinate/?utm_source=McLane+Middleton+-+Employment+Law+Business +Guide&utm_campaign=5e0a0f1651-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term= 0_cb3d2edd77-5e0a0f1651-71829489