In this issue of Employment Flash: the new DOL rule on independent contractors, SCOTUS’s unanimous Sarbanes-Oxley whistleblower ruling, plus labor law developments in California,.
On January 29, 2024, in Cantor Fitzgerald, L.P. v. Ainslie, the Delaware Supreme Court reversed a decision of the Delaware Court of Chancery holding that a forfeiture-for-competition.
Let’s see how good you are at predicting the outcome and its rationale in a recently decided case involving the following facts: The controller of a Delaware LLC has.
Relevant Facts
Holdco’s operating agreement made Jonathan Teller and Sanjiv Mehra managers on Holdco’s two-person board. Unanimity was required to effect board action. Teller was a founder of Holdco and Mehra was responsible for day-to-day operations.
Holdco’s operating agreement also provided that if Teller and Mehra deadlocked, Holdco would be automatically dissolved. The operating agreement did not define deadlock.
Teller and Mehra held equal distribution rights in Holdco. In the event of a deadlock-triggered dissolution, Holdco would distribute its shares in Holdco’s subsidiary to members in proportion to their equity and the members would then replicate Mehra’s equal-distribution rights as to Holdco in the subsidiary.