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Course Details

Course Information
  • smart_display Format

    Live Online with Live Q&A

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Corporate Law

Date & Time
  • event Date

    Thursday, August 28, 2025

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.


  • Live Online


    On Demand

Early Bird Pricing!
MSRP
$297.00
$252.45
Save $44.55

Discount expires 9/4/25

This course is $0 with these passes:

CLE
ALL

This CLE course will guide counsel advising LLC planners, managers, and investors. The panel will discuss the importance of clear drafting and recent cases involving contractual waivers of fiduciary duties, the implied contractual covenant of good faith and fair dealing, and the risks of opportunistic conduct by the managers and controlling members.

Faculty

Michael P. Maxwell
Partner
Potter Anderson & Corroon LLP

Mr. Maxwell provides advice to clients on matters of Delaware corporate and business law for transactions involving alternative entities and corporations, including investment and private equity fund transactions, joint ventures, cross border transactions, mergers, acquisitions, dissolutions and restructurings. He also advises management, boards and special committees of Delaware entities on matters of operation and governance, including with respect to fiduciary duty and contractual interpretation issues. Additionally, Mr. Maxwell represents both lenders and borrowers in a variety of commercial financing transactions, including asset-based financing, real estate mortgage financings and other credit related transactions.

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Thomas E. Rutledge
Member
Stoll Keenon Ogden PLLC

Mr. Rutledge devotes his practice to business and securities law with a specialized focus on the law of business organizations. He is actively involved in the LLCs, Partnerships and Unincorporated Entities Committee of the Section of Business Law, ABA and was an ABA advisor to the Uniform Law Commission Drafting Committee on the Uniform Statutory Trust Entity Act and Uniform Entity Transactions Act.

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Description

Minority owners in an LLC are, in many ways, subject to the whim of the majority with limited statutory and common law protection against what they may view as “oppression.” Those considering investment in an LLC, negotiating the operating agreement, counseling as to disputes among the members, or contemplating litigation should be aware of the limitations of protection for minority members.


Most state LLC statutes do not provide minority LLC owners with preemptive rights unless their operating agreement provides for them. Likewise, many LLC operating agreements give the majority the right to make capital calls and provide for potentially severe consequences if the minority members fail to meet those capital calls.


Some LLCs have provisions in their operating agreement that allow for the expulsion of members in certain circumstances such as upon a majority or supermajority vote of other members. In some states, including those states adopting the Revised Uniform LLC Act, an LLC can request that a court expel a member based on a finding of wrongful conduct, willful and persistent breach of the operating agreement, or that it is not reasonably practicable to continue the LLC with that member.


Some LLC Acts permit the majority members to effect a freeze-out merger with a minority owner of the original entity receiving no ownership interest in the new entity and only the liquidated value of his or her interest. Significant disputes can arise as to the measure of value of the cashed-out minority interest, the terms of payment, etc.


The doctrine of independent legal significance may permit the majority owners to artfully circumvent protections the minority owners believe they have negotiated; whether the implied contractual covenant of good faith and fair dealing will limit that opportunistic conduct remains to be fully determined.


Listen as our panel discusses recent cases involving contractual waivers of fiduciary duties, contractual discretion, and best practices in protecting the interests of minority owners and challenging managers' actions.

Outline

I. Operating provisions that limit minority owner rights in LLCs

II. Delaware law and recent cases involving contractual waiver of fiduciary duties

III. Issues for minority investors in challenging management decisions

IV. Avoiding pitfalls and protecting minority interests in LLCs

Benefits

The panel will review these and other critical issues:

  • Negotiating operating agreement provisions for minority owners
  • Methods to protect minority investors in LLCs
  • Challenging LLC transactions and management decisions through litigation