Category: Member Disputes

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/

WEAPONIZED LLCS

By , October 9, 2018 5:36 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/

ONE 50% SHAREHOLDER WANTS TO SELL OR LIQUIDATE THE BUSINESS. THE OTHER WANTS TO KEEP IT GOING. IS THAT DEADLOCK?

By , June 12, 2018 2:53 pm

Under the link below is Peter Mahler’s post, which he titles as follows:  “New Post from NY Business Divorce: One 50% Shareholder Wants to Sell or Liquidate the Business. The Other Wants to Keep It Going. Is That Deadlock?”  Needless to say, his post is highly relevant not only to state-law business corporations but also to multi-member LLCs.

Here’s the link:  https://www.nybusinessdivorce.com/2018/03/articles/deadlock/one-50-shareholder-wants-sell-liquidate-business-wants-keep-going-deadlock/

IMPLIED COVENANT

By , June 6, 2018 6:44 pm

Peter Mahler’s post under the link below about the implied contractual covenant of good faith and fair dealing provides a brief but very sound and practical discussion of that doctrine.  The doctrine is relevant to every LLC formation and internal dispute.

Here’s the link:  https://www.nybusinessdivorce.com/2018/02/articles/delaware/will-someone-please-re-name-implied-covenant-good-faith-fair-dealing/

RECENT LLC BUSINESS DIVORCE CASES

By , March 5, 2018 3:03 pm

Peter Mahler’s post, under the link below, discusses five recent business divorce cases, four of which involve LLCs and all of which contain useful lessons both with respect to the litigation of LLC internal disputes and with respect to the drafting of operating agreements to avoid these disputes.

Here’s the link:

https://www.nybusinessdivorce.com/2018/01/articles/uncategorized/winter-case-notes-llc-deadlock-recent-decisions-interest/

POST FROM PETER MAHLER ABOUT VALUATION AND INSOLVENCY

By , February 13, 2018 6:13 pm

The link to Peter’s post is below.  Here is Peter’s introduction to the post:

“Delaware Chancery Court Rulings Address Valuation and Insolvency Disputes

By Peter Mahler on Jan 15, 2018 06:11 am

If you’re a business appraisal aficionado, you won’t want to miss this week’s New York Business Divorce featuring two recent decisions by the Delaware Chancery Court involving fair value and insolvency determinations.”

The link:  https://www.nybusinessdivorce.com/2018/01/articles/valuation/delaware-chancery-court-rulings-address-valuation-insolvency-disputes/

TOP TEN BUSINESS DIVORCE CASES OF 2017

By , January 3, 2018 3:50 pm

Under the link below is Peter Mahler’s latest Business Divorce blog post.  It identifies and summarizes what Peter views as the top ten business divorce cases of 2017 as addressed in his posts.  Most of these cases involve multi-member LLCs, and most of them have obvious and important lessons for lawyers drafting LLC operating agreements.

Here’s the link:  https://www.nybusinessdivorce.com/2018/01/articles/annual-top-10-cases/top-10-business-divorce-cases-2017/

DERIVATIVE SUIT BY LLC 50/50 MANAGING MEMBER

By , June 29, 2017 2:48 pm

The post under the link below addresses an interesting Delaware Court of Chancery decision on derivative rules in suits between the two equal managing members of an LLC.  The decision is likely to be influential outside Delaware, and it’s a significant angle on an all-important task for LLC lawyers—handling member deadlocks.

Here’s the link:

https://delawarechancery.foxrothschild.com/derivative-actions/derivative-demand-requirements-equally-apply-to-actions-asserted-by-5050-member-of-an-llc/?utm_source=Fox+Rothschild+-+Delaware+Chancery+Law+Blog&utm_campaign=2c211dbca2-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_86821ff155-2c211dbca2-70733165

FIVE LLC CASES

By , May 18, 2017 3:48 pm

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/

TWO BUSINESS DIVORCES

By , May 11, 2017 3:50 pm

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