Part 9- Partnerships, Chapter 40: Limited Liability Companies, Limited Partnerships, and Limited Liability Limited Partnerships, Doc 6

Here’s a summary of the partnership law scenarios and issues addressed: 1. Payment upon Dissociation (Olson Case): o Olson claimed Delaware law required payment of fair value upon his forced departure from Viking Global Investors LLC. The court, however, upheld the LLC’s written agreement, which limited his payout to his capital account and accrued compensation, rejecting any oral agreements for additional fair value payments. 2. Transfer of LLC Property at Below-Market Value (Strickland Case): o Bonnie Strickland transferred property from the family LLC to a nonmember son at a price that a co-owner believed was undervalued, raising fiduciary duty concerns. Despite an LLC operating agreement that deprioritized profit maximization, the court could find Bonnie breached her fiduciary duty if her actions harmed other equity holders or disregarded their interests. 3. Personal Liability on Contracts (Gamez Case): o Gamez, a member-manager of an LLC that failed to pay for a contract he signed, faced a lawsuit. Courts typically do not hold LLC members personally liable unless they signed in a personal capacity or the LLC’s separate entity status is ignored. 4. Member-Manager Rights (Everest and Rider Case): o Rider, who signed an agreement specifying Everest as the sole manager, contested his exclusion from decisions. The court likely would uphold the manager-managed LLC structure since Rider agreed to the arrangement, regardless of his initial understanding. 5. Transferee Rights in an LLC (Nesbitt and Portraro Case): o When Nesbitt transferred his LLC interest to his daughter, Portraro, she sought member rights. Without explicit permission in the operating agreement, LLC law typically does not grant voting or managerial rights to transferees. 6. Fiduciary Duty in Non-Profit LLC (Strickland Case): o Bonnie Strickland’s actions, while arguably in compliance with the LLC’s non-profit goals, may still constitute a fiduciary breach if they disregarded the financial interests or rights of other members, as fiduciary duties often extend beyond profit considerations. 7. Liability of a General Partner (Carpenter Case): o Carpenter believed she was a limited partner in Briargate Homes but was actually a general partner due to non-compliance with North Carolina's limited partnership registration requirements. General partner status likely subjects her to personal liability, as her belief was insufficient to alter her legal standing. 8. Liability of Foreign Limited Partners (Virginia Partners Case): o Virginia Partners’ limited partners are generally shielded from personal liability even though they failed to register the partnership in Kentucky, as limited liability status typically persists unless state law specifically imposes penalties on unregistered foreign partnerships. 9. Unpaid Capital Contributions (Brookside Realty Case): o Builders Steel argued that Brookside Realty’s limited partners, who hadn’t fulfilled pledged contributions, should be liable for its debt. Courts often hold partners accountable for unpaid capital, especially when such obligations are documented in the partnership certificate. 10.Limited Partner Acting as General Partner (Blinder, Robinson Case):  Blinder, Robinson’s extensive involvement in managing an event promoted by the partnership might lead a court to consider it acted as a general partner, exposing it to liability. Under the ULPA, a limited partner’s actions could increase liability if they exhibit control over the partnership’s management. 11.Limiting Liability as a General Partner (Mattson Case):  To avoid personal liability, Mattson, a general partner, could structure the partnership as an LLLP or use a corporate entity as the general partner, ensuring her liability remains limited to her capital contribution in business obligations.