Was it your long-time confidant who says your fiancee isn’t good enough for you and then runs off and marries her, or a seller’s remorse on a hundred-million dollar scale? We don’t know yet, but in Allen v. Devon Energy Holdings, a Houston court set guidelines for the trial of a case involving redemption of a member’s ownership interest in a limited liability company for a fraction of the amount he would have received in the sale of the entire company 20 months later.
This was an appeal of a summary judgment, not a trial, so no actual wrongdoing by anyone was established.
The facts are complicated and the legal analysis is detailed, which makes this post longer than usual. For lawyers, it is a quick treatise on the ins and outs of fraud claims and a warning that the “boilerplate” in your agreements might not be as effective as you think. For non-lawyers, it is about legal issues that could affect behavior among members of LLCs and shareholders of corporations, whether majority or minority owners.
Having tried in vain to avoid the turgid legalese non-lawyers have come to expect from people like me, I’ve inserted musical interludes about cheatin’ and betrayal that should help alleviate the stupefying boredom you are about to experience. For example: