Penal Code Remedies for LLC Misappropriation?
Can the sledgehammer remedies of California Penal Code section 496 — treble (triple) damages and attorney fees — apply for misappropriation of an LLC’s property? The…
LLC Managers or Members With “Sole Discretion” Must Still Act in Good Faith
LLC managers (or members vested with decision-making authority) are sometimes lulled into a false sense of security by “sole discretion” provisions in their LLC’s operating agreement. …
Courts Split Over Application of Penal Code to Claims of LLC Misappropriation
Almost one year ago, in Switzer v. Wood, California’s Fifth Appellate District held that an LLC manager or member participating in the theft of the LLC’s…
LLC Managers: No Immunity for Bad Faith Conduct
Under the “default” rules of most limited liability company laws, including California’s Revised Uniform Limited Liability Company Act, LLC managers owe fiduciary duties to the LLC…
Cannabis LLCs Are Not All “Peace and Love”
Limited liability companies (LLCs) are a popular modern form of business entity celebrated for their ease of implementation and informality. Despite the enactment of uniform legislation…
Can Derivative Claims be Pursued for a Dissolved or Cancelled LLC?
Today’s post focuses on a thorny issue arising from the LLC Jungle — can derivative claims be pursued on behalf of a dissolved or cancelled LLC?…
Can the Criminal Law Concept of “Receiving Stolen Property” Apply to LLC Disputes?
In the LLC Jungle, allegations of “misappropriation” are common. LLC members and managers sometimes improperly divert the LLC’s funds and property for their own personal use. …
Why Having “Co-Managers” for Your LLC is a Terrible Idea
The trend in most real estate-related LLCs is to have a single appointed manager. Under the LLC’s operating agreement, the manager typically has authority to make…
Why LLC Managers Should Take Member “Books and Records” Requests Seriously
Under California’s Revised Limited Liability Company Act (“RULLCA”), LLC participants have substantial freedom to structure their relationship in a customized manner under their governing operating agreement. …
LLC Managerial Authority and Dealings with Third Parties
One of the recurring issues I see in my litigation practice is LLC managers engaging in “questionable conduct” with third parties — outsiders to the LLC.…