Recent News

“Until our legislature declares otherwise, Washington is a demand futility state and follows Delaware.” This phrase in the Washington Supreme Court opinion In re F5 Networks, Inc., 166 Wn.2d 229, 240, 207 P.3d 433 (2009) had a significant impact on derivative action litigation throughout the State of Washington. I write this post in an effort… Read More

On November 15, 2020, Washington Governor Jay Inslee held a press conference to announce a roll-back of the state’s County-By-County phased reopening plan in response to what he described as a third wave of COVID-19 in Washington state.  This marks the eighth time Governor Inslee has amended his original March 23, 2020 “Stay Home-Stay Healthy”… Read More

The derivative action is the source of increasing consternation throughout the legal industry. Today’s post brings a little insight into the fundamentals of a derivative action in Washington. What is it? A derivative action permits a shareholder or member the right to sue third parties on behalf of the entity. The purpose behind the derivative… Read More

In conjunction with many practitioners throughout the State of Washington, I am pleased to announce that the new third edition of the Washington Partnership and Limited Liability Company Deskbook is now available online or in print.  The Third Edition completely replaces the 2010 edition. I am honored to have been selected as one of the… Read More

No two closely held business are alike.  In a corporate setting, following corporate formalities is critical for a host of reasons, including to maintain the separateness of the corporation from the shareholders.  A recent Washington decision, Nelson v. Vetter, Inc., No. 80144-9-I, 2020 WL 6036825 (Wn. App. Oct. 12, 2020), reminds us of the need… Read More

In the Washington Supreme Court’s recent opinion in Young v. Toyota Motor Sales, U.S.A., many plaintiffs’ attorneys added a bigger hammer to their tool belt. The case effectively broadens the applicability of Washington’s Unfair Business Practices Act (or Consumer Protection Act, “CPA”), RCW 19.86. Many civil litigants and their counsel should be aware of the… Read More

In keeping with last week’s theme, this post discusses reverse veil piercing. Reverse veil piercing is the process by which an entity’s assets may be used to satisfy a judgment against a member/shareholder/partner in their individual capacity. Reverse veil piercing is the opposite of corporate veil piercing, where the assets of the member/shareholder/partner may be… Read More

Collecting a judgment is always a challenge, especially when the judgment debtor holds an interest in an LLC.  This article delves into the exclusive remedy available to creditors against judgment debtors with interests in a limited liability company: the charging order. Statute The charging order is a statutory remedy established by RCW 25.15.256 and available… Read More

This post compares the limited liability company (“LLC” – RCW 25.15) and limited liability partnership (“LLP” – RCW 25.05.500). LLC The LLC is perhaps the youngest and most popular entity of choice for entrepreneurs looking to start their business. An LLC combines tax and management flexibility with a liability shield for members. Nevertheless, there are… Read More