Individuals form limited partnerships, limited liability companies and corporations to limit their personal liability. These legal structures encourage entrepreneurs to take risks. The California Court of Appeal, Second Appellate District, however, has made it easier to add a business owner to a judgment that initially was entered only against the corporate or limited partnership entity he or she owns. In Relentless Air Racing LLC v. Airborne Turbine Ltd Partnership (Dec. 31, 2013) 2d Civil No. B244612, the Second Appellate District reversed the trial court’s finding that the business owner could not be added to the judgment under an “alter ego” theory. The Court of Appeal required the limited partners, as well as current and former general partner entities to be added to the judgment against the limited partnership.
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When Is a Non-Binding Term Sheet or Letter of Intent Enforced as a Binding Contract?
In almost all corporate transactions, the first piece of written documentation the parties exchange and execute (after a non-disclosure agreement) is a letter of intent or term sheet (“LOI”), which is intended to summarize the main deal points. And as many corporate transactions involve entities organized in Delaware, these documents often select Delaware as the governing law.
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