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The Memberless LLC And Diversity

When faced with someone who is blowing things out of proportion, one response might be "Don't make a federal case out of this!"  Sometimes, it may not even be possible to make a federal case.  The reason is that federal courts are courts of limited...

Limited Liability Companies

Court: Operating Agreement Did Not Grant Terminated Employees Lifetime Jobs

An employment agreement is one thing and an operating agreement quite another.  In ITV Gurney Holding Inc. v. Gurney, Cal. Ct. Appeal Case No. B281694, the board of a limited liability company fired two employees who were also managers.  The two...

Limited Liability Companies, employees, ITV Gurney Holding Inc. v. Gurney, operating agreement

Court Rules LLC Members May Be "Fiduciaries In Fact"

U.S. District Court Judge Tena Campbell's ruling in Strong v. Cochran, 2017 U.S. Dist. LEXIS 170073, is a reminder that sometimes what you do matters more than what you say.  The case involved claims by the liquidating trustee for a failed real...

Limited Liability Companies, llc, Tena Campbell, CAREIC, fiduciary in fact, Limited Liability Company, Strong v. Cochran

Are Limited Liability Companies "Persons"?

Limited liability companies did not exist when Congress enacted the Securities Act of 1933 and the Securities Exchange Act of 1934.  Therefore, it should be no surprise that as originally enacted these acts did not mention LLCs.  Congress has since...

California Securities Laws, Limited Liability Companies, LLCs, person, Exchange Act, Limited Liability Company, Section 25013, Section 2(a)(2), Section 3(a)(9), Securities Act of 1933

Inside And Outside Reverse Veil Piercing

UCLA Professor Stephen Bainbridge has published several posts commenting on my post discussing Curci Invs. v. Baldwin, 2017 Cal. App. LEXIS 698.  The issue in Curci was whether reverse veil piercing of a limited liability company is possible in...

Limited Liability Companies, hamartia, reverse veil piercing, Curci, Postal Instant Press, Stephen Bainbridge

California Court Green Lights Reverse Veil Piercing Of Delaware LLC

Courts historically have applied the alter ego doctrine to "pierce the corporate veil" so that a shareholder may be held liable for the debts or conduct of the corporation.  California has extended the possibility of alter ego liability to members...

Limited Liability Companies, llc, reverse veil piercing, Section 17705.03, Alter Ego, Baldwin, Curci Investments, Kaswa, Limited Liability Company, Postal Instant Press, Section 17703.04, veil piercing

Nevada Supreme Court Holds That Member-Managers Were Not Proper Parties To Negligence Claim Against An LLC

In an opinion issued yesterday, the Nevada Supreme Court addressed the extent to which a member of a limited liability company is protected in a negligence based tort action against the LLC.  Gardner v. Henderson Water Park, LLC, 133 Nev. Adv. Op....

Limited Liability Companies, Mark Gibbons, member liability, negligence, proper party, 86.371, 86.381, Gardner v. Henderson Water Park, liability, shield

Court Of Appeal Holds LLC's Former Counsel May Represent Insider Defendants In Derivative Suit

Derivative actions can be somewhat confusing.  Although the entity is essentially the plaintiff, it is named as a defendant.  Initially, one might question why must the corporation be named as a party?  I can think of at least two reasons.  First,...

Limited Liability Companies, Richard M. Aronson, Derivative Suits, Beachcomber Management, CCP Section 382, derivative, disqualification, successive representation

Court Declines To Impose Alter Ego Liability On LLC's President

In general, the debts, obligations, or other liabilities of a California limited liability company do not become the debts, obligations, or other liabilities of a member or manager solely by reason of the member acting as a member or manager acting...

Limited Liability Companies, llc, Show Ready, Alter Ego, default, Judge Otis D. Wright, liability, Limited Liability Company, Section 17703.04

The Limited Liability Company Agreement That Has No Name

Practitioners under California's Revised Uniform Limited Liability Company Act will be familiar with the concept of an "operating agreement" (Cal. Corp. Code § 17701.02(s)).  Indeed, I expect that nearly every LLC formed under the CARULLCA has, or...

Limited Liability Companies, llc, operating agreement, 2015 U.S. Dist. LEXIS 187188, CARULLCA, Hullinger v. Anand, members, Section 17704.01

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30172DBAB0084D3A8F39D7AF0A8E79BC.ashxKeith Paul Bishop
Partner at Allen Matkins
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