Case Study: CML V LLC V. Bax

Law360, New York (September 9, 2011, 1:31 PM EDT) -- In a recent en banc decision by the Delaware Supreme Court in CML V LLC v. Bax, 2011 Del. (Del. Sept. 2, 2011), the Delaware Supreme Court held that creditors of a Delaware limited liability company have no standing to assert derivative claims on behalf of an LLC, even if the LLC is insolvent. The ruling rests on the plain language of Section 18-1002 of the Delaware Limited Liability Company Act, which expressly provides that only members and assignees of an interest in an LLC have...
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