A Case Study In Business Divorce: Member Expulsion And Its Associated Hazards

By Daniel Glasser and James Kin The forced termination of any business relationship is painful. But the expulsion of a member from a limited liability company (an “LLC”) can raise additional challenges—especially where the rules of engagement are either poorly defined or undeveloped. For example, a recent decision by the Delaware Court of Chancery may leave members personally liable for …

Discharged Company Officer And Founder Settles Derivative Action and Wrongful Termination Suit on Favorable Terms

Chipman Glasser, LLC represented the founder and president of a high-tech bio-pharmaceutical company who was abruptly discharged after he brought to the company’s attention several questionable business practices. On the client’s behalf, the firm asserted claims of wrongful termination under the state whistleblowing law and brought a derivative action on behalf of the company. The case settled on terms favorable …

Reid Allred Presentation for the Colorado Microbusiness Alliance

Chipman Glasser partner, Reid Allred, will be giving a presentation for the Colorado Microbusiness Alliance on two nights next week—September 8, 2015 in Parker, Colorado and September 9, 2015 at Westminster, Colorado. Mr. Allred will be speaking about how business owners can effectively structure their businesses to avoid personal liability and minimize taxes. The presentation will include real-life experiences to …

Does LaFond Address Common Law Fiduciary Duties of LLC Members?

By Reid J. Allred and Maral Shoaei The Colorado Supreme Court, in a recent opinion, LaFond v. Sweeney, addressed the duties of a manager or member of a limited liability company (“LLC”) under Colorado law upon dissolution and winding up of an LLC. At first glance, LaFond appears to provide some needed clarity to the common-law fiduciary duties owed by …

Revisiting Fiduciary Duties of Members of Colorado LLCs

The law governing limited liability companies (“LLCs”) and their members is relatively undeveloped, and it continues to evolve.  One important question, for example, is whether the members of an LLC owe fiduciary duties to each other. In a previous blog post, we explored the existing case law on this subject from the corporate and partnership context.  And that post concluded that …

Fiduciary Duties of Members of Colorado LLCs

The limited liability company (LLC) enabling statutes in some states expressly set forth affirmative duties that LLC members owe to one another.[1]  Other state LLC enabling statutes expressly negate such duties.[2]  The Colorado Limited Liability Company Act[3] is silent as to whether LLC members owe a fiduciary duty to one another.  No published Colorado opinion has yet addressed this issue.  When …