(Code 1981, §14-11-304, enacted by Ga. L. 1993, p. 123, § 1.)
Law reviews.- For article, "The Georgia LLC Act Comes of Age," see 16 (No. 1) Ga. St. B. J. 20 (2010). For article, "2015 Georgia Corporation and Business Organization Case Law Developments," see 21 Ga. St. B. J. 30 (Apr. 2016).
JUDICIAL DECISIONS
Evidence supported finding of breach of fiduciary duty.
- In a direct action brought by a medical practice limited liability company member against another, sufficient evidence supported the trial court's finding that the member who remained in possession of the business failed to act in the best interest of the business and failed to exercise ordinary care when that member made the decision not to take any steps to have the exiting member's super bills processed and collected after the exiting member's departure. Given the high level of hostility and the bad blood between the parties over the operation of business, the trial court was authorized to find that the possessing member's decision was made in bad faith in an effort to negatively impact the exiting member's ownership interest in the business; therefore, the trial court was authorized to find that the possessing member breached the fiduciary duty owed to the business and the exiting member. Internal Med. Alliance, LLC v. Budell, 290 Ga. App. 231, 659 S.E.2d 668 (2008).
Purported owner was manager for insurance purposes.- In an insurance dispute, a purported owner of an athletic supplement company was a "manager" and therefore covered under the policy; the purported owner was designated by the sole member of the LLC as an individual entitled to handle all business matters, there was no evidence of removal from the position, and there was no statutory requirement that a manager also receive a salary. Evanston Ins. Co. v. Mellors, F. Supp. 2d (S.D. Ga. Sept. 28, 2015).
Member of limited liability company considered separate from company and not proper party to suit.
- The trial court did not abuse the court's discretion in denying a motion to set aside a consent judgment entered against a debtor, a limited liability company, as the fact that the company's sole member did not receive notice of the complaint or approve the consent judgment was insufficient to warrant that relief as the member was considered a separate legal entity from the company. Subsection (b) of O.C.G.A. § 14-11-304 expressly recognizes that managers designated in written operating agreement "shall have such right and authority to manage the business and affairs of the limited liability company as is provided in ... a written operating agreement." Old Nat'l Villages, LLC v. Lenox Pines, LLC, 290 Ga. App. 517, 659 S.E.2d 891 (2008).
Issue of fact existed concerning control.
- In spite of O.C.G.A. § 14-11-304(b)(1), a defendant's ability to appoint four managers gave the defendant de facto control of a manufacturer's eight-member board of managers, which created a genuine fact dispute as to whether the defendant was a managing member of the manufacturer and therefore owed fiduciary duties to another member. Denim N. Am. Holdings, LLC v. Swift Textiles, LLC, 816 F. Supp. 2d 1308 (M.D. Ga. 2011).
Bankruptcy filing.- Under the operating agreement and Georgia law, only the manager, with the approval of a majority in interest of the members, could have signed and filed a bankruptcy petition on behalf of the debtor. Debtor's bankruptcy petition was not properly signed by the manager of the debtor as required; thus, the case was dismissed. In re H & W Food Mart, LLC, 461 Bankr. 904 (Bankr. N.D. Ga. 2011).