THE DUTY TO INFORM SHAREHOLDERS

By , January 24, 2019 3:02 pm

The post under the link below discusses a recent Delaware Court of Chancery case holding that shareholder votes are invalid if the board fails to provide the shareholders with adequate information.  The application of the decision to non-manager members of LLCs is obvious.

Here’s the link:

https://www.klgatesdelawaredocket.com/2019/01/chancery-court-denies-dismissal-of-breach-of-fiduciary-duty-claims-after-concluding-that-stockholder-vote-was-not-informed/

FIXED-PRICE BUY-SELL AGREEMENTS

By , January 21, 2019 6:04 pm

The post by Peter Mahler under the link below is the best brief description of fixed-price buy-sell agreements among the owners of closely held businesses (including multi-member LLCs) I’ve ever seen—and it’s the best explanation I’ve ever seen of why not to use them.

Here’s the link:  https://www.nybusinessdivorce.com/2019/01/articles/valuation/another-reason-not-use-fixed-price-buy-sell-agreements/

JUDICIAL DISSOLUTION OF DELAWARE LLC FOUNDED ON FRAUD

By , January 18, 2019 1:05 pm

The post under the link below discusses a recent Delaware Court of Chancery case in which, under Delaware Limited Liability Company Act § 18-802, the court dissolved an LLC that had been founded on false claims of patent ownership and thus whose business was not “reasonably practicable.”  I suspect that at least a small number of other LLCs are formed every year that could well fall prey to § 18-802 or similar provisions under other LLC acts for having been founded on fraud.

Here’s the link:

https://www.klgatesdelawaredocket.com/2019/01/patently-false-the-delaware-chancery-court-dissolves-limited-liability-company-founded-on-false-claims-of-patent-ownership/

DELAWARE LLC ACT

By , January 15, 2019 4:15 pm

To those of you who form Delaware LLCs or review Delaware LLC agreements from time to time, the article under the link below may be of interest.

Here’s the link:   https://www.lexology.com/library/detail.aspx?g=ed247a58-b704-4a57-81be-89ca544fcd6b&l=87SBCLT

TOP TEN BUSINESS DIVORCE CASES OF 2018

By , January 3, 2019 4:12 pm

LLC lawyers need to follow business divorce cases because so many of them may be relevant to current situations of our LLC clients.  As most of you know, Peter Mahler follows business divorce cases and scholarship carefully and writes very useful weekly posts about them.  His latest post addresses what he views as the ten most important business divorce cases in 2018.  To view this post, click here:

https://www.nybusinessdivorce.com/2018/12/articles/annual-top-10-cases/top-ten-business-divorce-cases-2018/

ZUCKERBERG ET AL

By , December 20, 2018 8:19 pm

The fascinating article cited below explains why Mark Zuckerberg and his wife set up an LLC rather than, say, a foundation, as the vehicle for the multi-billion dollar charitable activities they intend to fund and conduct.

70 Fla. L. Rev. 921
Florida Law Review
September, 2018
Article
Dana Brakman Reiser
Copyright © 2018 by the Florida Law Review; Dana Brakman Reiser
DISRUPTIVE PHILANTHROPY: CHAN-ZUCKERBERG, THE LIMITED LIABILITY COMPANY, AND THE MILLIONAIRE NEXT DOOR

PARTNERSHIP AUDIT RULES

By , December 18, 2018 3:22 pm

Lawyers who draft LLC operating agreements for multi-member LLCs must handle, among many other issues, the issue whether these agreements should contain provisions addressing the possible impact of the BBA partnership audit rules on the relevant LLCs.  The post under the link below by the law firm of Ropes and Gray addresses new final Treasury regulations potentially relevant to the drafting of such agreements.

Here is the link:  https://www.disputingtax.com/2018/11/treasury-issues-final-rules-partnership-representatives-new-proposed-rules-partnership-audit-regime/#page=1

AMENDMENTS TO DELAWARE LLC ACT

By , December 13, 2018 5:44 pm

Several significant amendments to the Delaware Limited Liability Company Act became effective on August 1, 2018.  A brief but useful discussion of these amendments may be found under this link: https://www.taftlaw.com/news-events/law-bulletins/delaware-limited-liability-company-act-new-statutory-constructs

LLCS AND SUSTAINABILITY

By , December 10, 2018 3:59 pm

For LLC lawyers and their clients who are concerned about climate change, the post under the link below may be of great interest:

https://www.mofo.com/resources/publications/181030-delaware-transparancy-sustainability-standards.html

FREEZE-OUTS VS. FIDUCIARY DUTIES

By , November 28, 2018 3:45 pm

Under the following link is another excellent post about a recent case addressing the above issue: https://www.pbwt.com/ny-commercial-division-blog/commercial-division-holds-that-fiduciary-duties-limit-llc-majority-members-ability-to-adopt-amendments-aimed-at-freezing-out-minority-members/#page=1