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…
To Moot a Statutory Buyout, LLC’s Dissolution Must be Valid Under its Operating Agreement
In 2022, The LLC Jungle covered the opinion Friend of Camden, Inc. v. Brandt in a post titled LLC Dissolution Vote Defeats Statutory Buyout. In the…
LLC Member Acting for LLC Without Authority Is Not “Protected Activity” Under California’s Anti-SLAPP Statute
California’s anti-SLAPP statute (Code of Civil Procedure section 425.16) aims to protect defendants from meritless lawsuits designed to chill “protected activity” — i.e., the exercise of…
The Perils of Buying Property from an LLC with Competing Claims to Managerial Authority
Prior LLC Jungle posts have addressed the tricky issue of LLC managerial authority in the context of the LLC’s dealings with third parties. See: LLC and…
LLC Manager’s Conduct Benefits Her Side Entity at the Expense of the LLC — Are the Claims Against Her Direct or Derivative?
The distinction between direct and derivative claims is a recurring theme on The LLC Jungle. In a nutshell, under California law, an LLC (just like a…
Operating Agreement Doesn’t Excuse Breach of Fiduciary Duty
Many posts on The LLC Jungle blog have focused on the fiduciary duties owed by LLC managers to both the LLC’s members and the LLC itself.…
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 —…
Alter Ego Liability for LLC Managers: the Facts Matter
Alter ego liability is a frequent topic covered in The LLC Jungle — see here for a list of all prior “alter ego” related posts. The…
LLC and Partnership Authority “Safe Harbors”
California’s statutes governing LLCs and general partnerships include “safe harbor” provisions making it easier for third parties to rely on the apparent authority of an LLC’s…
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),…