Will a court support BHA\'s attempt to cancel the contract? What will be BHA\'s

Question

Will a court support BHA's attempt to cancel the contract? What will be BHA's likely theory of the case? 2. Assume that the managing members agreed with the transaction and signed on in agreement. Given BHA's choice of business entity, what are the options for financing this transaction? 3. Would an LLP be a better form than an LLC for BHA? Why or why not? 4. Assume that Luciano didn't bring the opportunity to the LLC members, but rather purchased the competing dealership with another partner outside the LLC. Subsequently, Luciano offers to sell the dealership to BHA at a premium over what he paid for it. Has Luciano breached his fiduciary duty? If so, which one? Do the operating agreement terms protect him from any liability to the other members? Why or why not? 5. Assume Luciano wants to bring a breach of fiduciary duty suit against the managing members, but his state does not provide a specific right to file a derivative suit. Could Luciano file a derivative suit in the absence of a specific right in the statute?

Explanation / Answer

The court shouold support BHA.

BHA’s theory will be that because Luciano was a not a managing member of the LLC, he was not authorized to negotiate and finalize the contract of merger. The LLC was a managed by managers. And the LLC was clearly specified in the operating contract. So there’s no ambiguity about the responsibilities of the members of management team.

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