Perry v. Stuart, 2025 WL 1501935 (Cal. Ct. App. May 27, 2025)

In Perry v. Stuart the California Court of Appeal, Sixth District, addressed certain issues pertaining to a demand for inspection that was made by a member of the LLC. The Court’s holding is not only applicable to the parties in the case, but also might be instructive for other LLCs, LLC managers, members, officers and boards in similar circumstances. LLC governance and litigation are interesting and can be challenging because of their flexibility in some circumstances but also their definite or fairly definite statutory or operating agreement requirements in other circumstances.

In relevant part the Opinion in Perry v. Stuart held as follows:

1. That the LLC is ordered to provide former members of the manager managed LLC the information (in hardcopy or readable electronic form) required to be maintained by Cal. Corp. Code §17701.13(d)(6);

2. That the former members who had made a demand for inspection of records of the LLC under Cal. Corp. Code §17704.10 had standing as at they were members of the LLC at the time that they made their demand;

3. That Cal. Corp. Code §17704.10 and in particular §17704.10 subdivision (c) and subdivision (c)(3) are to be read as they are written (e.g., unless stated in the statute, do not require financial records that are either audited or signed by an accountant); and

4. That there was sufficient evidence that the LLC’s actual member list constituted a protected trade secret, but that the names and addresses of the members were obtainable or discoverable as required by statute or by other means such as through information that was contained in other LLC records that were required to be produced or made available (see also, e.g., Cal. Corp. Code §§17704.10(a) and 17701.13(d)(1).

David W. Tate, Esq.

Please reach out to me if you have an LLC issue, or reach out on other topics.

* * * *

Thank you for viewing and reading this discussion. Please do pass this blog and blog post and information to other people who would be interested as it is only through collaboration and sharing that great things and success are more quickly achieved. If you are interested in discussing anything that I have said in the discussion above or in either of my two blogs (see blog addresses below), or if you simply want to reach out or are seeking assistance, it is best to reach me by email at dave@tateattorney.com.

David Tate, Esq. (and inactive CPA)

Trust, estate, probate, power of attorney, fiduciary, beneficiary, conservatorship, and elder and dependent adult abuse litigation and contentious administrations, undue influence, fraud and deceit, physical and mental health and challenging and contentious personalities and relationships.

Trust, estate and probate administrations and litigation involving special assets such as business ownership interests and operating businesses, asset co-ownership disputes, contentious governance, intellectual property assets, art and collectible assets, ongoing future contractual rights, buyouts and sales, M&A disputes, businesses divorces, and accountings.

Businesses and third party disputes and litigation – contract, licensing, co-business, royalty and other arrangements, unfair business practices, fraud and deceit, lack of good faith and fair dealing, buyouts and sales, mergers, acquisitions, ventures, etc.

Business co-ownership and internal governance disputes and litigation, business divorces, buyouts and sales, merger and acquisition disputes, family, closely held and professional businesses, accountings, and audits, D&O, boards, audit committees and investigations. Legal authority, duties, rights, conflicts of interest, diligence, compliance, liability, BJR, legal risk management, and resolution.

Real property and co-ownership disputes and litigation.

Trials.

Mediator and dispute and litigation resolution services.

Other and additional disputes, litigation and issues that fall within the above areas – court and trial evidence, persuasion, debate and fallacies, using AI assistance, IP, meetings, defamation, risk management processes, workplace, new laws, regulations and government actions – impact/legality, law and legal matters in the news, etc.

Remember, every case and situation is different. It is important to obtain and evaluate all of the evidence that is available, and to apply that evidence to the applicable standards and laws. You do need to consult with an attorney and other professionals about your particular situation. This post is not a solicitation for legal or other services inside of or outside of California, and, of course, this post only is a summary of information that changes from time to time, and does not apply to any particular situation or to your specific situation. So . . . you cannot rely on this post for your situation or as legal or other professional advice or representation, or as or for my opinions and views on the subject matter.

Also note – sometimes I include links to or comments about materials from other organizations or people – if I do so, it is because I believe that the materials are worthwhile reading or viewing; however, that does not mean that I do not or that I might not have a different view about some or even all of the subject matter or materials, or that I necessarily agree with, or agree with everything about or relating to, that organization or person, or those materials or the subject matter.

Please also subscribe to this blog and my other blog (see below), and connect with me on LinkedIn and Twitter.

My blogs are:

http://tateattorney.com – business, D&O, audit committee, governance, compliance, etc. – previously at http://auditcommitteeupdate.com

Prior blog: Trust, estate, conservatorship, elder and elder abuse, etc. litigation and contentious administrations http://californiaestatetrust.com

David Tate, Esq. (and inactive California CPA) – practicing only as an attorney in California.