LLC Operating Agreements

558 Pages·2012·7.19 MB·English

Presenting a live 90-minute webinar with interactive Q&A

LLC Operating Agreements
Crafting Provisions on Fiduciary Duties, Indemnification and Exculpation to Minimize Business Disputes

TUESDAY, MARCH 27, 2012
1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific
Today’s faculty features:
Benyamin S. Ross, Gibson Dunn & Crutcher, Los Angeles
Tammy L. Mercer, Young Conaway Stargatt & Taylor, Wilmington, Del.
Melissa K. Stubenberg, Director, Richards Layton & Finger, Wilmington, Del.

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TABLE OF CONTENTS

Document Name Tab
I. Sample Provisions
A. Waiver of Fiduciary Duties............................................................................ 1
B. Discretionary Consents.................................................................................. 2
C. Indemnification/Advancement....................................................................... 3
D. Exculpation – Conflicts of Interest................................................................ 4
E. Exculpation – Corporate Opportunities......................................................... 5
II. Chart of Relationships 6
III. Cases and Applicable LLC Agreements
A. Kahn v. Portnoy, 2008 WL 5197164 (Del. Ch)............................................. 7
1. Amended and Restated Limited Liability Company Agreement of
TravelCenters of America LLC......................................................... 8
B. Fisk Ventures, LLC v. Segal, 2008 WL 1961156 (Del. Ch.) 9
1. Limited Liability Company Agreement of Genitrix, L.L.C............... 10
C. Bay Center Apartments Owner, LLC v. Emery Bay PKl, LLC, 2009 WL
1124451 (Del. Ch.)........................................................................................ 11
1. Limited Liability Company Agreement of Emery Bay Member, LLC.
............................................................................................................ 12
D. Baker v. Impact Holding, Inc., 2010 WL 2979050 (Del. Ch.)....................... 13
E. Kelly v. Blum, 2010 WL 629850 (Del. Ch.)................................................... 14
1. Amended and Restated Operating Agreement of Atlas Energy
Resources, LLC.................................................................................. 15
F. In Re Atlas Energy Resources, LLC, 2010 WL 4273122 (Del Ch.).............. 16
1. Second Amended and Restated Operating Agreement of Marconi
Broadcasting Company, LLC............................................................ 17
Sample Provisions
Waiver of Fiduciary Duties
(a) This Agreement is not intended to, and does not, create or impose any fiduciary
duty on any of the Members hereto or their respective Affiliates [or designees on the Board of
Managers] [, or any [Member or their designee on the Board of Managers, in their capacity as
an] Officer][, other than as explicitly set forth [herein / in Sections ]. Further, each of the
Members and the Company hereby waives any and all fiduciary duties that, absent such waiver,
may be implied by Law, and in doing so, recognizes, acknowledges and agrees that the duties
and obligations of each Member[, their designees on the Board of Managers] [, and any [Member
or their designee on the Board of Managers, in their capacity as an] Officer] to the other
Members and to the Company are only as expressly set forth in this Agreement.
Sample Provisions
Consents
(a) Any consent, approval, determination or other action by a Member [(or its
designee on the Board of Managers)] required or that may be provided pursuant to the terms of
this Agreement, unless otherwise explicitly set forth herein, shall be given or taken in the sole
and absolute discretion of that Member [(or its designee on the Board of Managers)] in the best
interests of such Member and without regard to the best interests of any other Member or the
Company or the financial, tax or other effect on any other Member or the Company.

Sample Exculpation Provisions
Corporate Opportunities
(a) Each Member acknowledges that the other Members and the Affiliates of such
Members own and/or manage other businesses, including businesses that may compete with the
Company, the other Members and the Managers. Except as otherwise provided in this
Agreement, without any accountability to the Company or any Member by virtue of any
applicable duty (including fiduciary duty) or this Agreement:
(i) Each Member and its Affiliates, and their respective officers, directors,
shareholders, partners, members, agents and employees[, and each Manager designated
by such Member] (collectively, a “Corporate Opportunities Group”), shall not in any way
be prohibited or restricted from engaging or investing in, independently or with others,
any business opportunity of any type or description[, including, without limitation, those
business opportunities that might be the same or similar to the Company Business];
(ii) Neither the Company nor any Member or such Member's Corporate
Opportunities Group shall have any right in or to such other business opportunities of any
other Member or such other Member's Corporate Opportunities Group or to the income
or proceeds derived therefrom;
(iii) No Member or its Corporate Opportunities Group shall be obligated to
present any business opportunity to the Company or any other Member or such other
Member's Corporate Opportunities Group, even if the opportunity is of the character that,
if presented to the Company, could be taken by the Company, or if presented to any other
Member or other Member's Corporate Opportunities Group, could be taken by such
Persons; and
(iv) Each Member and its Corporate Opportunities Group shall have the right
to hold any such business opportunity for its own account or to recommend such
opportunity to Persons other than the Company, any other Member or any Person in such
other Member's Corporate Opportunities Group.