Rescission of an LLC Deal and the Attorney Fee Award Aftermath
The right to contractual attorney fees for parties “prevailing” in litigation is covered by a deep body of case law. So is the concept of rescission…
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…
An Inherited LLC Interest is not a Full Membership Interest
Under California Corporations Code section 17701.02(r), an LLC membership interest includes three components: a transferable interest (right to receive distributions in accordance with the operating agreement);…
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…
Operating Agreement Cannot Waive Member Right to Seek Judicial Dissolution of LLC
Among the important rights held by members of California LLCs is the right to file a lawsuit requesting a decree of judicial dissolution of the LLC. …
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…