LLC Agreements May Need Tune-Up After Del. Ruling

Limited liability companies may want to take a second look at the agreements that govern their operations after a Delaware court ruling, corporate governance attorneys told Bloomberg BNA.

The Delaware Chancery Court said in Obeid v. Hogan that an LLC couldn’t appoint a non-director to a special litigation committee because it had opted for a “corporate-style governance structure” and shown its desire to be covered by corporate law, rather than LLC law133 CARE, 7/12/16, 133 SLD, 7/12/16, See previous story, 07/12/16, 48 SRLR 1441, 7/18/16.

Under state law, only directors can serve on a corporation’s special committees.

LLCs are the most common ...