Law Specifies Fiduciary Duties for Members and Managers of New Jersey LLCs A Series on New Jersey’s Adoption of the Revised Uniform Limited Liability Company Act The fiduciary duties imposed on a member or manager of a New Jersey LLC are at present elusively and poorly defined in the statute. …
Court Rejects as Unnecessary Statutory Interpretation Finding Fiduciary Duties in LLC Act One of the burning issues in limited liability company law is the existence and scope of the fiduciary duties that are the core of the business relationship between the owners and managers of the business. Our discussion of a…
Purchaser Alleges Mortgage Was Not Approved by All LLC Members A mortgage given by a New Jersey limited liability company to one of its members can be challenged by the purchaser in a court-approved sale of the business, the Appellate Division holds, reversing the trial court. This case arises out…
Ownership Transfer Rejected When Stock Certificate Note Endorsed One of the principles of corporate law that comes up with some frequency in shareholder disputes is that a share certificate is not an interest in a company, but only evidence of ownership. That does not mean, however, that the formalities for issuing…
Claims of Shareholder Oppression Are Disputed by Majority Owner A motion for judicial dissolution of a retail business based on the claims that the majority owner had oppressed the minority shareholders should be denied when the facts are in dispute. An evidentiary hearing is necessary to resolve the disputed issues. …
Dispute Related to Repurchase of Shares Under Buy-Sell Agreement Subject to Agreement to Arbitrate Agreements to arbitrate are frequently added to buy-sell agreements and other corporate governance contracts. These agreements will be enforceable in nearly all circumstances and the parties should be certain that arbitration – rather than litigation in…
Court Issues Writ of Execution on Minority LLC Interest of Ex-Spouse One of the perceived benefits of the limited liability form of doing business is the limited remedy that a creditor has when attempting to use the LLC member’s interest as a source to satisfy a judgment. The majority position has…
Operating Agreements for Limited Liability Companies to Change Under Revised Limited Liability Company Act Part of an ongoing series on the adoption of New Jersey’s revised limited liability company act. The amendments to the New Jersey’s Limited Liability Company Act, N.J.S.A. 42:2C-1-94 that begin to take effect in March 2013 will…
Fraudulent Inducement Claims Rejected by Court In Shareholder Buyout Dispute The broad release language contained in a buyout agreement is enforced, despite claims of fraudulent inducement, affirms the Appellate Division of Superior Court in Marino v. Twin Rivers Podiatry, P.A., Docket No. A-5630-10T1 (May 19, 2012). This short opinion is…
Employee Held Liable for Actively Competing With Current Employer The success of businesses in specialized fields often depends on the employees’ ability to deliver consistent-quality service and implement specialized techniques and processes. Business owners in these fields know that the costs of investment in employee training and development can be…