Your Honor – An LLC Is Not A Corporation… Mr. and Ms. Litigator, Your Help Is Needed. By Herrick K. Lidstone, Jr.

Mr. and Ms. Litigator, Your Help Is Needed
By Herrick K. Lidstone, Jr.
Burns, Figa & Will, P.C.
April 10, 2019

Too many times our judicial officers issue opinions in cases that do not accurately reflect
the law of business entities. For example, in Stockdale v. Ellsworth, the Colorado Supreme Court
decided a case involving a Wyoming limited liability company under Colorado law, ignoring
Colorado’s internal affairs doctrine found at C.R.S. § 7-90-805(4) which would have normally
resulted in the application of Wyoming law to the questions at issue. Previously, the Colorado
Court of Appeals had similarly ignored Colorado’s internal affairs doctrine when affirming the
trial court in Martin v. Freeman, applying Colorado law to a Delaware limited liability company
merely because the LLC’s sole place of business was in Colorado. This type of judicial mistake
has emerged yet again in the Court of Appeals’ decision in Gagne v. Gagne (Gagne II). Although
not in a manner that affected the proper outcome of the case, this type of judicial mistake leads to
bad precedent for business lawyers attempting to interpret the statutes as written and for future
litigants and needs to be addressed.

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