Delaware Business Litigation Report

Court Of Chancery Explains How To Determine Memerbership Interests

Grove v. Brown, C.A. 6793-VCG (August 8, 2013)

This is an interesting decision because it explains what is the effect when a member fails to pay the consideration contemplated by the LLC operating agreement to obtain his membership interest.  The answer is determined by what the operating agreement says is the consequence, loss of interest or just a debt owed to the LLC.

This is also an example of what a mess may be created when parties try to do their own legal work in setting up an entity and working their way through disputes.

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