September 26, 2022

Volume XII, Number 269

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September 26, 2022

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Who Are The "Other Members"?

Last Friday, I wrote about a recently issued Court of Appeal opinion with respect to California Corporations Code Section 17707.03.  That statute provides that a court may decree the dissolution of a limited liability company pursuant to "an action by any manager or by any member or members" of an LLC.  The statute also allows the "other members" of the LLC to avoid the dissolution by buying for cash the membership interests "owned by the members so initiating the proceeding".  Cal. Corp. Code § 17707.03(c)(1).  The statute refers to the member(s) filing the action as "moving parties" even though the buy-out is not triggered by the filing of a motion by those members and the "other members" as the "purchasing parties".  

Section 17704.07(c)(6) unequivocally states that a "person need not be a member to be a manager".  Thus, when an action for judicial dissolution is brought by a manager who is not a member, there would seem to be no members initiating the proceeding and hence no "moving parties".   If there are no "moving parties", it ineluctably follows that there can be no "other members" and hence no "purchasing parties".  

© 2010-2022 Allen Matkins Leck Gamble Mallory & Natsis LLP National Law Review, Volume XII, Number 220
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About this Author

Keith Paul Bishop, Corporate Transactions Lawyer, finance securities attorney, Allen Matkins Law Firm
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Keith Bishop works with privately held and publicly traded companies on federal and state corporate and securities transactions, compliance, and governance matters. He is highly-regarded for his in-depth knowledge of the distinctive corporate and regulatory requirements faced by corporations in the state of California.

While many law firms have a great deal of expertise in federal or Delaware corporate law, Keith’s specific focus on California corporate and securities law is uncommon. A former California state regulator of securities and financial institutions, Keith has decades of...

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