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

IS A SCHEDULE K PROOF OF A PERSON’S MEMBERSHIP IN AN LLC?

By , November 20, 2018 2:45 pm

Is a Schedule K-1 proof of a person’s membership in an LLC?  For an answer to this very important LLC question, click on the following link to Peter Mahler’s latest blog post:

https://www.nybusinessdivorce.com/2018/11/articles/standing/schedule-k-1-enough-prove-llc-membership/

INSPECTION RIGHTS

By , November 16, 2018 5:31 pm

In any disputes among members and managers of LLCs, the inspection rights of the members are likely to be key to resolution of these disputes.  The post in the NY Business Divorce blawg under the link below summarizes several key cases addressing inspection right issues.

Here’s the link:  https://www.nybusinessdivorce.com/2018/10/articles/access-to-books-and-records/inspection-rights-oral-operating-agreements-pop-diva-delights/

DELAWARE CORPORATE CASE RELEVANT TO LLCS

By , November 14, 2018 4:09 pm

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 5:42 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 1:07 pm

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 1:20 pm

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 2:52 pm

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/