Business Formation - Blogs
- Musings on Good Faith
Posted by Douglas Moll Maybe I'm missing something, but what independent role does the implied covenant of good faith and fair dealing have in a dispute over a fiduciary duty waiver? (There's a $25,000 question). Assume an LLC operating agreement...
(September 5, 2008) - Built-In Gain and Built-In Loss Property on Formation of a Partnership
posted by Gary Rosin Daniel L. Simmons (UC-Davis) has posted this accepted paper on SSRN: Built-In Gain and Built-In Loss Property on Formation of a Partnership: An Exploration of the Grand Elegance of Partnership Capital Accounts: This article is a...
(September 3, 2008) - ABA Record Owners Legislation Task Force
First, some background. A pending bill in the U.S. Senate, S. 2956, 110th Congress, 2nd Session, would require each state to collect beneficial owner information for all corporations of LLCs formed, and to make that information available to Federal authorities....
(September 3, 2008) - Profits-Only Partnership Interests
posted by Gary Rosin Bradley T. Borden (Washburn) has posted this accepted paper on SSRN: Profits-only partnership interests grant service-providing partners an interest in the profits of a partnership but not its capital. Such interests are a proverbial double-edged sword:...
(September 3, 2008) - Subprime Securities Lawsuit Dismissal Denied
We are now well into the second year of the current subprime litigation wave, but the rulings on preliminary dismissal motions are still just trickling in. In the latest of the early returns, involving one of the earliest subprime securities lawsuits, Judge James T. Giles of the Eastern District of Pennsylvania in an opinion dated August 29, 2008 denied defendants' motion to dismiss the securities lawsuit pending against home builder Toll Brothers and nine of its directors and officers. A copy...
(September 3, 2008) - D&O Insurance: The Pollution Exclusion and Securities Claims
A recurring D&O insurance coverage concern involves the question whether the standard pollution exclusion typically found in most D&O policies could preclude coverage for a securities lawsuit alleging pollution-related misrepresentations or omissions. An August 15, 2008 opinion (here) by a New Jersey intermediate appellate court addressed this issue squarely. The New Jersey Superior Court Appellate Division per curiam opinion affirmed a trial court determination, in a coverage case...
(September 2, 2008) - Delaware Court of Chancery on good faith and the duty of loyalty in a Revlon setting again
The Delaware Court of Chancery has erroneously held that it was correct in its earlier decision to permit a case to survive summary judgment under Stone v. Ritter without facts indicating that the defendants intended to violate a known duty. In Ryan v. Lyondell Chemical Co. (Ryan II) (letter opinion dated August 29, 2008) (HT Francis Pileggi here), Vice Chancellor Noble took 26 pages to decide defendants' motion for certification of an interlocutory appeal of his earlier decision in the...
(September 2, 2008) - "In Terrorem" Dissolution Waivers
posted by Gary Rosin Peter A. Mahler (New York Business Divorce blog) asks WWDD (What Would Delaware Do) With an In Terrorem LLC Dissolution Waiver Clause? Mahler discusses a recent New York trial court ruling, In re Young man, in...
(September 1, 2008) - D&O Insurance: Consequences of Withheld Settlement Consent
In prior posts (here and here), I discussed two recent decisions in which courts held that D&O insurance coverage was precluded for settlements the insureds entered without first obtaining the insurers' consent as required under the applicable policies. An August 19, 2008 Second Circuit opinion (here) addressed the related question of what happens when the insured seeks but the insurer withholds settlement consent. Based on the somewhat strained circumstances involved, the Second Circuit...
(August 31, 2008) - What "Property" Was Initially Contributed to Jack Rayan Limted Partnership? ...
posted by Gary Rosin Do we know enough to be able to judge the reasoning of the Maryland Court of Appeals in Clancy v. King, No. 112/2007 (MD August 26, 2008) (slip op.)? That court's opinion can only begin to...
(August 28, 2008) - Barone and Lessons in Statutory Drafting
There is, or at least there has been in my experience, a tendency in many statutory drafting efforts to say that a particular point need not be addressed because it is already addressed by "other law." Now even if unspoken,...
(August 27, 2008) - Subprime Lawsuits Mount, So What About D&O Pricing?
Observers outside the D&O insurance industry frequently comment to me that with all the subprime-related litigation, D&O pricing must be skyrocketing. These observers are often puzzled when I respond that the D&O marketplace remains generally competitive and pricing advantageous to buyers. This same conversation recurs with sufficient frequency that if may be worth exploring in greater depth. It may also be worth considering whether or not current marketplace conditions may be...
(August 27, 2008) - What's Next: Climate Change Financial Risk Disclosure
In a development of potentially great significance for climate change disclosure and reporting issues, on August 27, 2008, New York Attorney General Andrew Cuomo announced (here) that Xcel Energy had entered a "binding and enforceable agreement" requiring the company "to disclose the financial risks that climate change poses to investors." Xcel's announcement regarding the agreement can be found here. The agreement follows Cuomo's September 2007 subpoenas to Xcel and four other utilities...
(August 27, 2008) - Looking For Trade and Tariff Stats?
Is your small business looking for statistics on trade volume or tariff information. Take a look at the WTO's statistics site, which breaks down trade volume into imports or exports as well as gives detailed tariff information for all WTO members. The database is searchable and you are able to select specific criteria to search by utilizing a straight forward interface. [stat.wto.org]Daniel H. Erskine, Esq., an international attorney, practices in New York and Connecticut focusing on...
(August 27, 2008) - Sienfeld v. Shakespeare. Clancy v. King (MD 2008)
posted by Gary Rosin The difference between the Maryland and the Delaware judiciaries? Seinfeld and Shakespeare. The recent opinion by Chancellor Chandler in R & R Capital, LLC v. Buck & Doe Run Valley Farms, LLC (discussed here and here)...
(August 26, 2008) - Getting LLC Dissolution Right. In Re Dissolution of Beverwyck Abstract, LLC (NY Ad 2008)
posted by Gary Rosin In Troubles with "Dissolution," I criticized some recent opinions that applied UPA dissolution concepts to LLCs. I'm happy to report that in In Re Dissolution of Beverwyck Abstract, LLC, 2008 N.Y. Slip Op. 06337 (N.Y. A.D....
(August 26, 2008) - Contractual v. Fiduciary “Good Faithâ€
posted by Gary Rosin As I have already noted, the recent opinion in R & R Capital, LLC v. Buck & Doe Run Valley Farms, LLC, CA No. 3803-CC, 2008 WL 3846318 (Del. Ch. Ct. August 19, 2008). Indeed, Chancellor...
(August 25, 2008) - Modes of Gap Filling: Good Faith and Fiduciary Duties Reconsidered
posted by Gary Rosin Mariana Pargendler, a J.S.D. candidate at Yale, has an interesting article just out: Modes of Gap Filling: Good Faith and Fiduciary Duties Reconsidered, 82 Tulane l. Rev. 1315 (2008). Here's the SSRN abstract: This article offers...
(August 25, 2008) - Arbitration and Judicial Dissolution
posted by Gary Rosin Yesterday, I noted a recent Delaware Chancery court decision involving an LLC Agreement with a waiver of the right to judicial dissolution. On the New York Business Divorce blog, Peter A Mahler discusses a couple of...
(August 24, 2008) - Pileggi on Delaware LLCs
posted by Gary Rosin Francis G.X. Pileggi (Delaware Corporate & Commercial Litigation blog) has co-authored a short article, Benefits of Being a Delaware Company and Recent Developments in the Governance of LLCs, in Vol. 2, No. 33 of the Bloomberg...
(August 24, 2008)