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fiduciary duties, good faith and fair dealing, implied covenant, liability of LLC manager, limitation of liability, limited liability company, managing member liability
Delaware limited liability companies have become a popular vehicle for real estate joint ventures and preferred equity investments in real estate. As a manager, co-manager or managing member of an LLC, you may have certain duties and liabilities to your partners and to the company itself, even beyond those expressly set forth in the limited liability company agreement. In this article, we will look at a couple of recent decisions under Delaware law and how those decisions affect attempts to minimize liability to LLC managers. Continue reading »
In a down market, partnership disputes tend to rear their heads with increasing frequency, and many partners begin looking for a way out[
Following up on the series of articles over the past four weeks regarding 
Most well-drafted legal documents include language that provides that the agreement cannot be modified except by a written agreement signed by both parties — or some other provision of similar effect. You may think that means that nothing you say can modify the documents. However, this is not necessarily the case. Under New York law, even where an agreement contains an express no oral modifications clause, there are circumstances under which the agreement can be modified by what you say, your conduct, what you write in an email or other forms of communication that don’t amount to a written agreement.
If you have worked in the areas of structured finance or commercial real estate — even if you are not a lawyer — you may be familiar with the concept of “piercing the corporate veil.” You probably have used special purpose LLCs to limit the liability of individuals and to protect holding companies with substantial assets from the liabilities associated with a specific transaction. These structures are not without risk. You may have been advised that entities and individuals in the upper reaches of the structure chart may be exposed to the liabilities of their special purpose subsidiaries if a claimant is able to pierce the corporate veil. But beyond that the concept may remain a mystery.
During the real estate boom of the 90s and early 2000s mezzanine lending became a commonplace source of capital for developers and other sponsors. Now, as the economic downturn continues and real estate values continue to fall, more and more mezzanine lenders are finding themselves with defaulted loans. In this series, we will examine five critical considerations for mezzanine lenders to weigh before commencing enforcement action.
Whether you are a borrower, a B-piece holder or a foreclosing mezzanine lender, at some point you have found yourself in the unenviable position of dealing with a special servicer. By gaining insight into what motivates special servicers, you will solidify your negotiation strategy and better understand how to avoid a few common pitfalls.
