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…
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 In a recent unpublished opinion filed by…
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…
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…
Conspiracy and Aiding & Abetting: Non-Manager Liability for Breach of LLC Fiduciary Duties
LLC managers owe fiduciary duties of loyalty, care, and good faith and fair dealing to both the LLC and the LLC’s members. (Corp Code §17704.09.) One…
Statutory LLC Buyouts — “Fair Value” vs. “Fair Market Value”
Under section 17707.03 of California’s Revised Uniform Limited Liability Company Act, when a member sues the other members for dissolution of the LLC, the other members…