In Part 1<\/a> of The Jayson Law Group LLC\u2019s<\/a> series on the Revised Uniform Limited Liability Company Act<\/a> (\u201cRULLCA) we discussed what a derivative action is and how a derivative action can be brought.\u00a0 In Part 2<\/a> of this series The Jayson Law Group LLC discussed the proper plaintiff and what the proper plaintiff must allege in the complaint.\u00a0 In Part 3 we will discuss the Special Litigation Committee and how they are created.\u00a0<\/span><\/p>\n

The Special Litigation Committee<\/strong><\/p>\n

Section 42:2C-71 describes the Special Litigation Committee that should be established if an LLC is named or made a party to a derivative action<\/a>.\u00a0 It should be noted that the Special Litigation Committee is not a requirement, but its function is to protect the members or managers of the LLC moving forward with the derivative action.<\/span><\/p>\n

The purpose of the Special Litigation Committee is to determine whether it is in the best interest of the LLC to pursue the derivative action.\u00a0 Because of the purpose of the Special Litigation Committee, Section 42:2C-71(a) requires the court stay discovery for a reasonable amount of time so that the Special Litigation Committee can complete its investigation.<\/span><\/p>\n

Who Comprises the Special Litigation Committee<\/strong><\/p>\n

The Special Litigation Committee is comprised of one or more disinterested and independent individuals<\/a>.\u00a0 Section 42:2C-71(c) makes a distinction between member-managed and manger-managed LLC, but this section treats types of managed LLC\u2019s the same in appointing the people to the Special Litigation Committee.\u00a0 The appointment of the Special Litigation Committee is created by the consent of the majority of the members\/managers not named as defendants or plaintiffs in the proceeding.\u00a0 If all members\/managers are named as parties to the derivative action then the Special Litigation Committee will be appointed by the members\/managers named as defendants in the derivative action.<\/span><\/p>\n

This concludes Part 3 of The Jayson Law Group LLC\u2019s<\/a> examination of the RULLCA\u2019s derivative action law.\u00a0 In the next post<\/a> we will continue looking at the Special Litigation Committee by examining what the Special Litigation Committee does and also what happens to the proceeds and benefits should the plaintiff succeed in the derivative action.<\/span><\/p>\n

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In Part 1 of The Jayson Law Group LLC\u2019s series on the Revised Uniform Limited Liability Company Act (\u201cRULLCA) we discussed what a derivative action is and how a derivative action can be brought.\u00a0 In Part 2 of this series …<\/p>\n","protected":false},"author":2,"featured_media":1963,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[6],"tags":[],"class_list":["post-1659","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-law"],"yoast_head":"\n