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…
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…
LLC Members May Ratify Prior Defective Actions
Actions taken within business entities are sometimes deemed invalid due to procedural defects. For corporations, section 119 of the Corporations Code establishes a clear procedure by…
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…
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.…
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. …
Partnership — Not Its Partners — Owns Malpractice Claim Against Partnership’s Attorney
Two important principles governing corporate entities are: (1) the entity is legally distinct from its owners; and (2) the entity’s property and assets belong to the…
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 —…
“Equitable Buyout” as a Remedy for LLC Wrongdoing?
In the world of LLCs, buyouts — where one member sells his/her membership interest to another member or the LLC itself — are commonplace. Buyouts generally…