Sham LLC Election Leads to Standing Defect and Vacation of $20 Million Judgment
The LLC Jungle has frequently posted on a common battleground issue in LLC litigation: authority to act for the LLC. (See here for a few posts…
Lost Motion for Bond at Outset of Derivative Case Does Not Preclude Later Award of Prevailing Party Costs
As a safeguard against frivolous derivative lawsuits brought “on behalf of” an LLC, Corporations Code section 17709.02 allows a defendant to file a motion for an…
The Sometimes Fuzzy Line Between Representing an LLC and its Members
A prior LLC Jungle post — An LLC’s Attorney Represents the LLC’s Members Too, Right? — covered the Sprengel v. Zyblut opinion, which confirmed the general rule…
Can a California Court Order Managerial Removal for a Delaware LLC?
Under the “internal affairs doctrine,” the laws of an LLC’s state of formation will usually govern matters concerning its internal affairs — i.e., matters peculiar to…
A Poke Bowl Full of Breached LLC Duties
LLC litigation involves many complex issues, and it’s not always easy to allege a claim properly. Some cases never get out of the starting gate, with…
What if an LLC’s Books and Records Contain Trade Secrets?
One of the most important rights owned by LLC members is the right to inspect the LLC’s books and records. For an overview of LLC books…
You Come at the LLC Manager, You Best Not Miss
In a popular TV series (The Wire), a well-known quote is: “You come at the king, you best not miss.” The idea is that if you’re…
LLCs Can Assert Offensive Claims Against Members
In “business divorce” litigation involving LLCs, it is common to see a disgruntled LLC member asserting claims against the LLC’s manager. Depending on the type of…
Appointing a Receiver to Safeguard Against LLC Shenanigans
A prior post — A Receiver For Your LLC? — covered the basics of court-appointed receivers acting on behalf of an LLC. It is always worth…
The “Business Judgment Rule” Applies in LLCs Too
Corporate directors have long relied on the “business judgment rule,” under which their decisions are presumed to have been made “on an informed basis, in good…