NEW: Patton Sullivan Brodehl discusses “buyout” provisions in LLC operating agreements that allow the LLC or its remaining members to buy the membership interest of a departing member, and case law addressing points of unclarity in such provisions in About That LLC Buyout . . . .
LLC Default Rules Are Hazardous to Member Liquidity discusses a shift in default LLC rules from partnership law toward corporate law, arguing that removal of liquidity rights and limitations on member remedies have led entrepreneurs to unintentionally lock themselves into perpetual entities and imposed costly obstacles to enforcing their rights.
The Kentucky Business Entity Law blog and Creighton University’s Professor Joshua Fershée spar over a proposed “overt disclosure” requirement for eliminating the fiduciary duty of loyalty in an LLC Agreement in Respectfully, I Dissent: Dean Fershee and Elimination of Fiduciary Duties; Dissent Duly Noted: LLCs, Private Ordering, and Ample Notice; and Agreeing to Disagree.
An Overt Disclosure Requirement for Eliminating the Fiduciary Duty of Loyalty discusses a statutory requirement that the modification or elimination of fiduciary duties in an LLC agreement must be express so all parties to the agreement are informed of the modification or elimination and the extent of such changes.
NEW: Farrell Fritz discusses a New York appellate court decision affirming dismissal of one member’s petition to dissolve a New York LLC, where the LLC Agreement allowed a deceased member’s interest to pass to a family member without the other members’ written consent in LLC Survives Member’s Death. Dissolution Petition Doesn’t.
Farrel Fritz discusses disputes arising between Members and Managers attempting to effect a buy-out of one Member’s interest in an LLC under New York law in Operating Agreement Spawns Multiple Disputes Between 50/50 Members of Realty Holding LLC.