McBride Law Blog

BLOG

Tagged Posts: duty of loyalty’

The Perils of Joint Representation (Part 3)

September 26, 2015

Addressing a Conflict of Interest in a Joint Representation.

If you and your business partner still insist on the services of one lawyer, you would be relieved to know that the existence of a conflict of interest does not necessarily preclude a lawyer from representing more than one client in the same transaction.  But it is something that needs to be addressed proactively in light of all the facts and circumstances.

First, the lawyer needs to determine whether a conflict of interest exists and, if so, whether it can be waived by the clients’ informed consent.  … Read the rest

The Perils of Joint Representation (Part 2)

September 22, 2015

Why Every Client Needs To Have His or Her Own Lawyer.

It may not be readily apparent to most non-lawyers (and even some lawyers), but in every case or matter where a lawyer represents more than one person, there is potential for a conflict of interest, meaning the representation of one client will be directly adverse to another client or there is a significant risk that the representation will be materially limited by the lawyer’s responsibilities to another client.[1]  In everyday terms, this often means that, if a lawyer is working for two clients on the same issue, what is good for one client could be bad for the other client.  … Read the rest

The Perils of Joint Representation (Part 1)

September 15, 2015

Are you getting the best advice?  Who is looking out for you and your best interest?  If you are involved in a multi-party business deal, the lawyer involved may or may not be looking out for you and your economic interest.  Read on to learn more.

In our previous blog series on business divorce (available here), we discussed some of the most common situations that lead to a business break-up, including divorce, disability, death, and disagreement, and what business owners can do to protect their businesses in the event of a business breakup.  … Read the rest

Comparison of LLC Statutes

August 10, 2015

Other Considerations

So, now that you have done your research, you decide to form your LLC in Delaware and file the required forms in Delaware.  Is that all you need to do?  It depends on where you actually conduct business.  Most, if not all, states require foreign LLCs (i.e., LLCs formed under the laws of another jurisdiction) to register or apply for authority to do business in that state, if the LLC does business there.  What constitutes “doing business” in a particular state is often debatable, but having a principal place of business or regularly engaging in transactions would most likely count as such, subjecting the entity to the state’s foreign LLC filings, fees, and taxes.… Read the rest

Comparison of LLC Statutes

August 6, 2015

Court System: Who Will Hear My Case?

At times, even with careful planning and drafting, business relationships may turn sour and amicable resolution impossible.  This is where being a Delaware entity might prove to be decisively advantageous.  Delaware houses the nation’s oldest business court, the Delaware Court of Chancery established in 1792.[1]  As a court of equity, it has broad jurisdiction over disputes involving the internal affairs of Delaware business entities and has developed a respected body of case law interpreting Delaware business law.… Read the rest

Comparison of LLC Statutes

August 3, 2015

Series Availability: The Latest Option

Another interesting difference among LLC statutes is the availability of series LLC.  This relatively new concept is said to have its origin in offshore financial institutions as a way of allocating assets and risks among a series of companies.  Series LLC offers numerous advantages, which include flexible structure, greater protection against liability, and lower filing fee and administrative burdens, but is also fraught with uncertainty, particularly with respect to its treatment under federal bankruptcy law and the laws of states that do not recognize series LLCs. … Read the rest

Comparison of LLC Statutes

July 30, 2015

Fiduciary Duties: Do Managers Owe Special Duties to the LLC or Its Members?

A fiduciary duty is a legal duty to act solely in another party’s interests.  For those familiar with the context, a fiduciary duty is often likened to the duties of a trustee to hold property in trust.  Fiduciary duties generally encompass the duty of care (i.e., duty to act in good faith and exercise reasonable care in carrying out their obligations to the LLC) and the duty of loyalty (i.e.Read the rest

Comparison of LLC Statutes

July 27, 2015

Creditors’ Rights: Can My Creditors Go After the LLC’s Assets?

In Delaware, as in most other states, LLC members are generally not liable for the debts, obligations, and liabilities of the LLC.  We say generally, because there are situations where LLC members can be personally liable for business debts so as to allow courts to “pierce the corporate veil” based on, for example, fraud, intermingling of personal and business affairs, and improperly drafted operating agreements.  This is a highly fact-intensive analysis, the result of which may vary significantly depending on the specific circumstances and the jurisdiction.… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.