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Why I Find This Case To Be So Confusing
Monday, April 25, 2022

I recently came across Judge William Alsup's ruling in Carbon Crest, LLC v. Tencue Productions, LLC, 2022 U.S. Dist. LEXIS 66676.  However, the first two sentences of the ruling left me baffled:

At all material times, defendant Tencue Productions was a California limited liability company that provided event production services to other companies.  Defendant Jeffrey D. Wilk, a fifty-percent shareholder and board member of Tencue, sought to sell Tencue.

The description of Tencue as a limited liability company seems at odds with the characterization of Mr. Wilk as a shareholder and board member.  While the law does not preclude an LLC from referring to its members as "shareholders", Judge Alsup proceeds to apply Corporations Code Section 310 to the dispute.  That statute, of course, applies only to corporations. I checked the records of the California Secretary of State and found that there had once been a California corporation named "Tencue Productions, Inc."  However, that corporation had converted into a limited liability company named Tencue Productions, LLC in 2019.  It appears that the events giving rise to the parties' dispute arose before Tencue's conversion.  

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