Section 17613.

(a) No member of a limited liability company who has a right under this chapter to demand payment of cash for the interest owned by that member in a limited liability company shall have any right at law or in equity to attack the validity of the reorganization, or to have the reorganization set aside or rescinded, except (1) in an action to test whether the vote or consent of members required to authorize or approve the reorganization has been obtained in accordance with the procedures established therefor by the operating agreement of the limited liability company, or if there is no written operating agreement, this chapter, or (2) when the limited liability company action is fraudulent with respect to the complaining member or the limited liability company.

(b) If one of the parties to a reorganization is directly or indirectly controlled by, or under common control with, another party to the reorganization, subdivision (a) shall not apply to any member of the controlled party who has not demanded payment of cash for the member's interest pursuant to this chapter; but if the member institutes any action to attack the validity of the reorganization or to have the reorganization set aside or rescinded, the member shall not thereafter have any right to demand payment of cash for that member's interest pursuant to this chapter.

(c) If one of the parties to a reorganization is directly or indirectly controlled by, or under common control with, another party to the reorganization, then, in any action to attack the validity of the reorganization or to have the reorganization set aside or rescinded, (1) a party to a reorganization that controls another party to a reorganization shall have the burden of proving that the transaction is just and reasonable as to the members of the controlled party, and (2) a person who controls two or more parties to a reorganization shall have the burden of proving that the transaction is just and reasonable as to the members of any party so controlled.

(d) Subdivisions (b) and (c) shall not apply if a majority in interest of the members other than members who are directly or indirectly controlled by, or under common control with, another party to the reorganization approve or consent to the reorganization.

(e) This section shall not prevent a member of a limited liability company that is a party to a reorganization from bringing an action against the limited liability company or any manager, officer, employee, or agent of the limited liability company, at law or in equity, as to any matters, including, without limitation, an action for breach of fiduciary obligation or fraud, other than to attack the validity of the reorganization or to have the reorganization set aside or rescinded.

(Added by Stats. 1994, Ch. 1200, Sec. 27. Effective September 30, 1994. Repealed as of January 1, 2014, pursuant to Section 17657. Thereafter, see Title 2.6, commencing with Section 17701.01.)