March 3, 2009
Statute of Frauds and UBE Agreements
Thomas E. Rutledge has posted on SSRN The Statute of Frauds and Partnership/Operating Agreements, J. Passthrough Entities 41 (November-December 2008), in which he discusses a recent holding by Vice Chancellor Lamb in Olsen v. Halverson, C.A. No. 1884-VCL (Del. Ch. Oct. 22, 2008) that the statue of frauds applies to LLC operating agreements. This despite Section 18-101(7) of the Delaware Limited Liability Company Act, includes "written, oral or implied" (emphasis added).
While we might disagree over the importance of signed writings to resolve disputes about the agreement of the parties, how in the world did an Operating Agreement for a hedge fund go unsigned?
posted by Gary Rosin