Derivative Claim Upheld for Estate of Deceased LLC Member
Asserting claims derivatively on behalf of an LLC, as opposed to directly on behalf of an LLC member, can be tricky business for even experienced litigators. …
Another Case Addressing Managerial Discretion and the Implied Covenant of Good Faith and Fair Dealing
LLC managers often enjoy wide latitude and unrestricted “discretion” under the LLC’s operating agreement. At the same time, all contracts — including LLC operating agreements —…
Receiver for LLC Can be Bound by Operating Agreement’s Arbitration Provisions
Courts often appoint receivers to manage the affairs of LLCs when the internal management is conflicted or broken. General equity receivers (as opposed to more limited…
Can an LLC Member be Forced to Contribute to the LLC’s Debts?
Members of an LLC are required to pitch in equally for the LLC’s expenses and debts, right? Generally, no. In a recent unpublished opinion filed by…
LLC Operating Agreements: Indemnity, Arbitration, and Equity
LLC operating agreements frequently provide for indemnity to the LLC’s manager. This is consistent with the statutory default rule embodied by California Corporations Code section 17704.08(a),…
Does an Operating Agreement’s Arbitration Clause Apply to a “Purported” LLC Member?
If an LLC’s Operating Agreement contains a sufficiently broad arbitration clause, most disputes raised by the LLC’s members relating to the LLC will be sent to…
Who Runs This LLC?
Under California law, LLCs can either be managed by all of the members (member-managed) or by a designated manager (manager-managed). Manager-managed LLCs are more common for…
LLC Operating Agreements Can Reduce Fiduciary Duties
LLC managers owe fiduciary duties both to the LLC and to the LLC’s members, similar to the duties owed by a partner to other partners in…
The DAO Jungle?
A DAO is a Decentralized Autonomous Organization. It’s a blockchain thing. How do DAOs relate to LLCs? And why are DAOs the subject of this post…
Does an Arbitration Clause Apply to Your LLC Dispute?
Suppose your LLC’s operating agreement contains a typical clause requiring all disputes to be resolved in binding arbitration instead of the court system. Is it then…