Business > DISCUSSION POST > GRADED BUS 607 Week 1 Discussions (All)
GRADED BUS 607 Week 1 Discussions
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Outline the fiduciary duties that the members of an LLC owe to each other. When Green Properties Group and Jones Group, Inc. entered into a partnership and formed the NewGroup, LLC., the fiduciary ... duty that they owed to the partnership is duty of loyalty and care. “The duty of loyalty can be breached by self-dealing, misusing partnership property, disclosing trade secrets, or usurping a partnership business opportunity” (Miller, 2014, p. 21). In this case, Green did not breach the loyalty of his partnership with Jones due to the fact that Green contracted out to other parties to develop parcels within the tract that NewGroup, LLC., owns in order to compete with them. Green knowingly entered into the partnership agreement knowing that either party could contract out parcels of land to be developed by another competing companies. Can the terms of the NewGroup, LLC., operating agreement alter these fiduciary duties? Explain why or why not. The operating agreements states, “no Member shall be accountable to the LLC or to any other Member with respect to any other business or activity even if the business activity competes with the LLC’s business”. In this case since the agreement allows for either party to develop tacts with competing company’s and not be held accountable to NewGroup, LLC., or it’s members. I feel that in this case the fiduciary duties are altered given the wording of the agreements. Wording in a contract or agreement can be interpreted and loopholes found if it is not worded correctly or in a way that would prevent a possible breach. In whose favor should the court rule in the above scenario? Why? In this case, I feel that the court should rule in the favor of Green Properties group given that the operating agreement clearly alters the fiduciary duties by allowing for either party to work with other businesses even if those businesses are in competition with NewGroup, LLC., Reference: Miller, R. L. (2014). Business Law: Text and cases – commercial law for accountants. Mason, OH: South-Western Cengage Learning. [Show More]
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