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 In a recent unpublished opinion filed by…
No RICO Standing for Cannabis LLCs
In business litigation, a plaintiff will sometimes assert a claim under the Racketeer Influenced and Corrupt Organizations Act (RICO), a federal statute at 18 U.S.C. §1961…
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),…
Diversion of LLC Funds 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…
LLC Dissolution Vote Defeats Statutory Buyout
Several prior LLC Jungle posts have explored the statutory buyout procedures established by California Corporations Code section 17703.03 and related statutes: a botched buyout “fair value”…
California Supreme Court: Penal Code Section 496(c) Can Apply To Business Disputes
In a long-awaited opinion — Siry Investment, L.P. v. Farkhondehpour — the California Supreme Court held that California Penal Code section 496 can apply to a business…
Derivative Claim Standing: Both Contemporaneous And Continuous Membership Required
When an LLC suffers primary harm that also indirectly harms the LLC’s members, the cause of action generally belongs to the LLC, not its members. Only…
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…
LLC “Lien Priority” Battle: Charging Order vs. UCC Financing Statement
A charging order is a device used by a judgment creditor to collect on a judgment against an LLC member. The charging order imposes a lien…
Alter Ego, Equity, and Reverse Veil Piercing for LLCs
The LLC Jungle blog covered “reverse veil piercing” in a 2019 post: “Reverse Veil Piercing” to Reach an LLC’s Assets” Normally, a business entity is considered…