The three majority members of a five-member limited liability company decide that they want to take a major action, such as selling the assets of the business or buying another business. They present the decision to the minority and proceed over their objections (We’ll assume for the moment that the…
The New Jersey Supreme Court will consider the standards for expulsion of a member from a limited liability company. The Court granted certification in IE Test, LLC v. Carroll, Docket NO. A-6159-12T4 (N.J. Super. App. Div., March 17, 2015)(see our discussion here.) The opinion construes N.J.S.A. 42:2B-24(b)(3)(a) of the now…
Appellate courts usually defer to a trial court’s factual findings in a business divorce case that makes it to trial. Here is a rare decision, however, in which the Appellate Division reversed the factual determinations of the trial judge, finding that the disputed ownership interest had been conceded by one…
Revised Uniform Limited Liability Company Act Changes Legal Landscape The effective date of New Jersey’s Revised Uniform Limited Liability Company Act is approaching. The law will be effective on March 18, 2013 for newly formed LLCs and will be applied to all LLCs effective March 1, 2014. There is…
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…
Limited Liability Company Act Transforms Principles of LLCs A new set of laws governing New Jersey limited liability companies will become effective in March. The changes are profound. The Limited Liability Company Act fundamentally changes a number of bedrock principles about the manner in which limited liability companies are organized and managed. Limited Liability…
LLC Member Who Refused to Retire Was Expelled by Managers The challenges in making the transition from the the founding members of a successful enterprise to the second generation of managers are often difficult, as this litigation involving that has endured for nearly a decade demonstrates. It may be that the business has…
Promoters of LLC Subject to Breach of Fiduciary Duty Claims Limited liability companies are clearly the vehicle of choice for new, closely held businesses. That means that more often than not the principals have some existing relationship before they take up their new business together. Can that prior relationship create…
When a limited liability company dissolves, it pays its creditors and distributes the remaining assets in the winding-down process. Many professional practices are organized as LLCs, and their principal assets are the clients they serve. That does not mean, however, that the professional limited liability company in dissolution has to divide up…