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Delaware Law Update

Delaware Law Update: Director Indemnification and Advancement of Legal Expenses (Part II)

| Dec 27, 2016 | , ,

In Narayanan v. Sutherland Global Holdings, Inc.,[1] there were three documents that were relevant to Narayanan’s rights to indemnification and advancement of expenses.  First, the company’s certificate of incorporation authorized indemnification and advancement through bylaw provisions, agreements, or otherwise, “in excess of the indemnification and advancement otherwise permitted by [Delaware law].”  Second, the company’s bylaws did provide such indemnification and…

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Delaware Law Update: Director Indemnification and Advancement of Legal Expenses (Part I)

| Dec 13, 2016 | , ,

Companies get sued all the time.  Directors and officers often get named in lawsuits as those responsible for important corporate actions and are particularly vulnerable in that regard.  For this reason, many companies offer their directors and officers liability insurance and certain contractual provisions to protect them against the burden of having to defend a lawsuit with their own money.  Indemnification…

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When Things Fall Apart: Business Partnership, Disagreement, and Dissolution (Part IV)

On Behalf of | Sep 8, 2016 | , , , , , ,

In Mizrahi v. Cohen,[1] a dentist and an optometrist formed a limited liability company for the purpose of the construction and operation of a mixed-use building in which they intended to set up their respective offices.  The two did not have an LLC agreement at the time they formed the LLC; it was executed a few months later when they…

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When Things Fall Apart: Business Partnership, Disagreement, and Dissolution (Part III)

On Behalf of | Sep 6, 2016 | , , , , , ,

In Saunders v. Firtel, as in Cline v. Grelock, the two business partners were close friends.[1]  Firtel was the sole owner of a pharmaceutical sales corporation called Adco and Saunders was a sales representative for a medical supply company.  In 1986, the two decided to enter into a formal business relationship by allowing Saunders to obtain a 49% shareholder interest…

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When Things Fall Apart: Business Partnership, Disagreement, and Dissolution (Part II)

On Behalf of | Aug 30, 2016 | , , , , , ,

In Cline v. Grelock,[1] the business partners were two lifetime friends who started a towing business called American Asset Recovery, LLC (“AAR”) d/b/a Hound Dog Recovery.  To get the business rolling, Grelock and Cline personally guaranteed a bank loan for AAR to purchase a motor vehicle for the business.  Unfortunately, the business was not very successful—it had substantial debts and…

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Make Sure To Read the Limited Partnership Agreement Before You Sign: Limited Partnership and Fiduciary Duties Under Delaware Law (Part II)

On Behalf of | Aug 25, 2016 | , ,

Dieckman v. Regency GP LP[1] involved the acquisition of Regency Energy Partners LP (“Regency”) by an affiliated entity in a merger.  Dieckman was a former unitholder of Regency.  Dieckman claimed that Regency’s general partner (“GP”) favored the interests of its affiliates in agreeing to an unfair merger price and, by doing so, breached the limited partnership agreement (“LP agreement”).  Specifically,…

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When Things Fall Apart: Business Partnership, Disagreement, and Dissolution (Part I)

On Behalf of | Aug 23, 2016 | , , , , , ,

Here at The R. Shawn McBride Law Firm, PLLC, we write and speak frequently on business partnership, especially the 4 Ds (death, disability, divorce, and disagreement), which can have a major impact on businesses.  In our previous blog series on business divorce, for example, we talked about why business partners may disagree, describing some instances of conflict that business owners…

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Make Sure To Read the Limited Partnership Agreement Before You Sign: Limited Partnership and Fiduciary Duties Under Delaware Law (Part I)

On Behalf of | Aug 18, 2016 | , ,

In our previous blog series on Comparison of LLC Statutes, we talked about fiduciary duties in the context of a limited liability company (LLC).  Fiduciary duty is a legal duty to act solely in another person’s interests.  It generally encompasses the duty of care (duty to act in good faith and exercise reasonable care in carrying out obligations to the…

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Is My Company’s Lawyer Also My Lawyer? (Part II)

On Behalf of | Jul 7, 2016 | , , , ,

As the case progressed, Meissner and Yun, the two former business partners, entered the discovery phase.[1] Meissner sought the disclosure of some email threads between Yun and attorney Christopher Kelly. Yun claimed that they were protected by attorney-client privilege and refused to produce them. As the court noted, for a party to assert this privilege, an attorney-client relationship must exist.…

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Is My Company’s Lawyer Also My Lawyer? (Part I)

On Behalf of | Jun 30, 2016 | , , , ,

In our previous blog on Meissner v. Yun, a New York case decided under Delaware law, we discussed the importance of a written LLC agreement (sometimes also referred to as member/operating/company agreement, depending on the jurisdiction) that spells out each member’s rights and obligations with specificity in the context of a break-up between two business partners.[1] In that case, the…

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