August 19, 2019

August 16, 2019

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An LLC Is Not A Corporation (Again)

Professor Joshua Fershee continues to chide courts for "careless language related to limited liability companies (LLCs)".  His post on the Business Law Prof Blog notes and quotes, but does not cite, a ruling from the Northern District of Illinois - Clayborn v. Walter Inv. Mgmt. Corp., 2019 U.S. Dist. LEXIS 34707.  Recently, I came across another ruling from the same district that also conflates corporations and LLCs:

"In support of its operation of law argument, TheBrain LP cites California Corporations Code section 17707.05. Section 17707.05 states that when a corporation becomes dissolved, any assets that remain after creditors have been paid "shall be distributed among the members according to their respective rights." See Cal. Corp. Code, § 17707.05."

Thebrain Techs. LP v. Anylogic N. Am., LLC, 2019 U.S. Dist. LEXIS 33692.  California lawyers should recognize that Section 17707.05 concerns the dissolution of an LLC under California's Revised Uniform Limited Liability Company Act.

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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm

Keith Paul Bishop is a partner in Allen Matkins' Corporate and Securities practice group, and works out of the Orange County office. He represents clients in a wide range of corporate transactions, including public and private securities offerings of debt and equity, mergers and acquisitions, proxy contests and tender offers, corporate governance matters and federal and state securities laws (including the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Act), investment adviser, financial services regulation, and California administrative law. He regularly advises clients...