North Carolina Lawyers Weekly
Defendant Burnette seeks indemnification from the defendant-limited liability company for the expenses he incurred in successfully defending a lawsuit brought by plaintiff, a co-member of the LLC. Both the Limited Liability Company Act (LLC Act) and the Business Corporation Act ...
Read More »Corporate — LLC – Litigation Expenses – Prior to Suit – Non-Lawyer Contractor – Voluntarily Dismissed Claims
Corporate — LLC – Operating Agreement – Unwritten Amendment – Equity Interest 
The operating agreement for the plaintiff-limited liability company does not contain a rule of equal dignities, requiring amendments thereto to be in writing. As a result, defendants’ forecasted evidence—(1) that defendant Smith was induced to leave another sports agency to ...
Read More »Corporate — Stock Agreement – Breach of Contract – Constructive Fraud – Accounting Practices
Plaintiff, who was in poor health and dire financial straits, signed a stock redemption agreement (Redemption Agreement) even though he disagreed with the agreement’s valuation of the defendant-corporation’s stock. However, nothing in the Redemption Agreement or in plaintiff’s complaint indicates ...
Read More »Corporate — LLC Operating Agreements – Member’s Death – Dissolution – Estate’s Interest
Although there were only two members of the three defendant-limited liability companies at the time their founder died, their operating agreements included a member’s death as a mandatory dissolution event “unless within 90 days following the occurrence, the Members mutually ...
Read More »Corporate — LLC Derivative Action – Pre-suit Demand – Application & Extension Order
Even if a letter to defendants constituted a demand as required by G.S. § 57D-8-01(a)(2), since the letter was sent after plaintiff commenced this action by filing an “Application and Order Extending Time to File Complaint,” the letter was not ...
Read More »Corporate — Appointment of ‘Independent Person’ – LLC Dissolution Action – Separate Derivative Action
When a derivative action is filed on behalf of a limited liability company, G.S. § 57D-8-03(f) says a “court may appoint a panel composed of one or more independent persons on motion of the LLC to make a determination whether ...
Read More »Corporate — Shareholder Status – Lack of Certificate – Estoppel – Trusts & Estates – Statute of Limitations
Plaintiff claims a 10-percent ownership in the defendant-corporation, but he never received a stock certificate. The corporation’s articles of incorporation require only that shares bear a restricted legend, and North Carolina law allows a corporation to meet that requirement in ...
Read More »Corporate — Merger Dissenters – Stock Purchase – Fair Value – First Impression
This case arises from the merger of Reynolds American Inc. (RAI) and British American Tobacco (BAT) and certain shareholders’ (dissenters’) claim that the price paid to RAI shareholders as a result of the merger was unfair. In our first consideration ...
Read More »Corporate – Declaratory Judgment – LLC Membership – Inspection Rights – Fraud & Breach of Contract
The complaint alleges the percentage interests that the plaintiff-investors claim to possess in defendant Omni Holding Group, LLC; that records received from Omni contain conflicting information concerning those interests; that Omni and defendant Alshalabi have refused to produce additional information ...
Read More »Corporate – First Impression – Derivative Action – Claims against Directors – Joint Representation of Corporation and Directors
Dual representation of a corporation and its directors in a shareholder derivative action was permissible where shareholders had not alleged serious misconduct by the directors, such as theft, fraud, or self-dealing. We deny plaintiffs’ motion to disqualify counsel from dual ...
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