One of the benefits to using a limited liability company
is the flexibility of being able to choose how the entity is taxed. After
a new LLC is formed, its owners must decide the method by which they would like
their business taxed. By default, an LLC is treated as a pass-through
entity, which means...
Auriga Capital Corp. v. Gatz Properties LLC ,
C.A. No. 4390-CS (Del. Ch., Jan. 27, 2012), read opinion here .
What this Case is About and Why it is
This case establishes a high-water mark in terms of
providing the most comprehensive explanation, based on legislative history and
Recently, the Delaware Court of Chancery issued a ruling
on the question of whether a manager (or managing member) of a Delaware limited
liability company owes fiduciary duties to the company and its members.
The court ruled that it does.
As a legal practitioner, this result is unsurprising.
Francis Pileggi and Kevin Brady of Eckert Seamans discuss
several aspects of recent rulings by the Delaware Court of Chancery in Auriga
Capital Corp. v. Gatz Properties LLC, C.A. No. 4390-CS (Del. Ch., Jan. 27,
On the Delaware Corporate and Commercial Litigation Blog , they
write that the case...
by Sidney Goldstein
In this EIA we will examine
various issues that should be fully explained by the professional advisor to
her client, before selecting the limited liability company (LLC) as the form of
business entity to be adopted. Since each state has adopted its own version of
a Limited Liability...
Gatz Properties LLC v. Auriga Capital Corp. , No. 148, 2012 (Del. Supr. Nov. 7, 2012) (Per Curiam).
Delaware's High Court held that the manager of an LLC violated a contracted-for fiduciary duty that adopted the equitable standard of entire fairness in a conflict of interest...
by Jeffrey M. Shapiro and Eileen Overbaugh
On March 18, 2013, the Revised
Uniform Limited Liability Company Act (the "Revised Act") becomes
effective and replaces New Jersey's existing Limited Liability Company Act (the
"Current Act") with respect to all limited...
There has been a back and forth between the Chancery Court and the Delaware
Supreme Court about whether there are default fiduciary duties for LLCs.
The Chancery Court takes the position that there are default fiduciary
duties, though you may contract around them. The Supreme Court on the
Grove v. Brown , C.A. No. 6793-VCG (Del. Ch. Aug. 8, 2013) [ an enhanced version of this opinion is available to lexis.com subscribers ]
Issues Addressed : This post-trial opinion addresses issues involved in a 4-person LLC whose members disputed: (1) what specific ownership interest each had in the...
On October 23 rd , I participated in a panel discussion relating to the LLC operating agreements. This was a webinar on drafting LLC agreements conducted by Financial Poise , a provider of CLEs and informational webinars for accredited investors, executives, and their legal and financial advisors. Preparation...
As I said in my recent post about LLCs, the internal governance of LLCs is largely determined by contract among the LLC members. This contract, called an operating agreement, is the centerpiece of each LLC. I strongly recommend every multi-member LLC to have a written operating agreement. The core elements...
In Re Interstate General Media Holdings, LLC, C.A. No. 9221-VCP (Del. Ch. Apr. 25, 2014) [ an enhanced version of this opinion is available to lexis.com subscribers ].
Why This Decision Is Notable : The Delaware Court of Chancery determined that a private auction was the best method to obtain the...
On December 29, 2014, New York State Governor Andrew Cuomo signed into law Assembly Bill 8106-C / Senate Bill 5885-B (the “Act”) . Among other changes to current law, the Act renders the ten members with the largest percentage ownership interest of each limited liability company (“LLC”...