The alleged efforts of a board of directors to entrench itself – which included refusing to permit dissent shareholders to vote at a shareholders meeting and issuing additional shares to give the board majority control of the company – were the subject of the Business Court’s opinion last Friday in Green v. Condra, 2009
Default Entered Against LLC Even Though Its Derivative Action Had Been Dismissed
Can you have a default entered against you if you aren’t a proper party to the lawsuit? The answer is yes, at least on the unique facts before the Business Court in its opinion Friday in the derivative action Regional Property Development Corp. v. Carpenter.
Regional Property, a member of Lancaster Industrial Park, LLC
Clemenzi v. Freer, April 23, 2009 (Diaz)(unpublished)
This case, which involved four related lawsuits between the shareholders of a closely held corporation, contains a discussion of when a claim is a compulsory counterclaim. The Court said "Rule 13(a) of the North Carolina Rules of Civil Procedure provides that a party is required to plead as a counterclaim: (1) “any claim which at
Court Of Appeals Reverses Order Granting Rule 11 Sanctions In A 2-1 Split
The Court of Appeals split yesterday on whether a Plaintiff and his lawyers who continued with a lawsuit after they should have determined that it was not well grounded in fact or law could be hit with non-monetary sanctions. The majority reversed, saying that the trial court should not have considered events occurring after the
Does The Manager Of An LLC Have A Fiduciary Duty To The Members Of The LLC?
The United States District Court for the Middle District of North Carolina dismissed an LLC member’s fiduciary duty claims against a manager based on grounds of standing in Morris v. Hennon & Brown Properties, LLC.
The Defendant LLC was an investor and member of three limited liability companies. It alleged in a counterclaim that
Western Piedmont Anesthesia, P.A. v. Barnette, November 20, 2007 (Tennille)(unpublished)
The Court dismissed the derivative claim of a minority shareholder who alleged that the majority shareholders of the corporation had breached their fiduciary duty to the minority shareholders by failing to make distributions, failing to investigate allegations on that subject, and terminating the minority shareholder’s employment.
The Court held that this was not a proper
Piedmont Venture Partners, L.P. v. Deloitte & Touche, L.L.P., March 5, 2007 (Diaz)(unpublished)
The person elected as liquidator to oversee the liquidation of the assets of two general partnerships was not entitled to limit his responsibility to the pursuit of a derivative action lawsuit against the auditor for the partnerships, as opposed to the general winding up of the affairs of the partnerships. The Court held:
the substantive problem
Regions Bank v. Regional Property Development Corp., 2008 NCBC 8 (N.C. Super. Ct. April 21, 2008)(Diaz)
A counterclaim by a member of a North Carolina LLC against the LLC’s lender for aiding and abetting a breach of fiduciary duty was derivative, not direct.
The Court relied on “[t]he well-established general rule . . . that shareholders cannot pursue individual causes of action against third parties for wrongs or injuries to the corporation that
Claim That LLC Made Unlawful Distributions Was Derivative, Not Direct
Regions Bank v. Regional Property Development Corp., 2008 NCBC 8 (N.C. Super. Ct. April 21, 2008) (Diaz)
The Business Court ruled today that a member of a North Carolina LLC could not sue the LLC’s lender for aiding and abetting a breach of fiduciary duty, because that claim was derivative, not direct.
Here are
Fliehr v. Storick, December 3, 2007 (Diaz)(unpublished)
A manager of an limited liability company may not, as a condition of the payment of consideration from a merger of the LLC, require that the member receiving the consideration execute a general release exonerating the manager and insiders from any misconduct. Holding the consideration "hostage" in exchange for such a release might amount to willful and