Marx v. Morris

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In this case brought by two members of an LLC against another member after the LLC sold valuable assets to a company owned by the defendant, the Supreme Court affirmed the decision of the circuit court denying the defendant's motion for summary judgment on the plaintiffs' claim that the defendant willfully failed to deal fairly with them while having a material conflict of interest, holding that there were genuine issues of material fact as to whether the defendant violated Wis. Stat. 183.0402(1).Daniel Marx and Michael Murray brought this action against Richard Morris, alleging that Morris violated the Wisconsin Limited Liability Company Law, Wis. Stat. ch. 183 and alleging a number of common-law claims involving improper self-dealing. Marx and Murray brought their claims in their individual LLC and personal capacities. The circuit court denied Morris's motion for summary judgment. The Supreme Court affirmed and remanded for further proceedings, holding (1) the members of an LLC have standing to assert individual claims against other members and managers of the LLC based on harm to the members or harm to the LLC; and (2) there were genuine issues of material fact as to whether Morris violated section 183.0402(1) by dealing unfairly with Marx and Murray, and potentially with regard to the common law claims. View "Marx v. Morris" on Justia Law