MICHIGAN LIMITED LIABILITY COMPANY ACT
Act 23 of 1993
450.4404 Managers; duties; action for failure to perform duties.
Sec. 404.
(1) A manager shall discharge the duties of manager in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the manager reasonably believes to be in the best interests of the limited liability company.
(2) In discharging the manager's duties, a manager may rely on information, opinions, reports, or statements, including, but not limited to, financial statements or other financial data, if prepared or presented by any of the following:
(a) One or more other managers or members or employees of the limited liability company whom the manager reasonably believes to be reliable and competent in the matter presented.
(b) Legal counsel, public accountants, engineers, or other persons as to matters the manager reasonably believes are within the person's professional or expert competence.
(c) A committee of managers of which the manager is not a member if the manager reasonably believes the committee merits confidence.
(3) A manager is not entitled to rely on the information, opinions, reports, or statements described in subsection (2) if the manager has knowledge concerning the matter in question that makes reliance otherwise permitted by subsection (2) unwarranted.
(4) A manager is not liable for an action taken as a manager or the failure to take an action if the manager performs the duties of the manager's office in compliance with this section.
(5) Except as otherwise provided in an operating agreement or by vote of the members pursuant to section 502(4) and (7), a manager shall account to the limited liability company and hold as trustee for it any profit or benefit derived by the manager from any transaction connected with the conduct or winding up of the limited liability company or from any personal use by the manager of its property.
(6) An action against a manager for failure to perform the duties imposed by this act shall be commenced within 3 years after the cause of action has accrued or within 2 years after the cause of action is discovered or should reasonably have been discovered by the complainant, whichever occurs first.
History: 1993, Act 23, Eff. June 1, 1993 ;-- Am. 1997, Act 52, Imd. Eff. July 1, 1997 ;-- Am. 2010, Act 290, Imd. Eff. Dec. 16, 2010
Notes of Decisions
Cited in
20
cases (
7 in the last 5 years), 2012–2026 · leading case:
Atlas Tech., LLC v. Levine, 268 F. Supp. 3d 950 (E.D. Mich. 2017).
Atlas Tech., LLC v. Levine, 268 F. Supp. 3d 950 (E.D. Mich. 2017).
· cites it 4× “” Mich. Comp. Laws § 450.4404 (1). That is the type of prescription that addresses the “organization and internal affairs” of a limited liability company, for which Atlas must'look to the law of Delaware, not Michigan.”
Tweedie v. Hermoyian (In re Hermoyian), 466 B.R. 348 (Bankr. E.D. Mich. 2012).
· cites it 6× “Paragraph 65 of the State Court Complaint alleged that the Debtor owed Tweedie the duties of a limited liability company manager of the Debtor’s Companies under Mich. Comp. Laws Ann. § 450.4404 . Paragraph 72 of the State Court Complaint alleged that the Debtor owed Tweedie the…”
Altobelli v. Hartmann, 884 N.W.2d 537 (Mich. 2016).
“4401; MCL 450.4404(2)(a) (“In discharging the manager’s duties, a manager may rely on information, opinions, reports, or statements .”
Frank v. Linkner, 871 N.W.2d 363 (Mich. Ct. App. 2015).
· cites it 5× “4515 and MCL 450.4404 — as statutes of repose — barred all claims under MCR 2.”
Ashley Techner v. Helen Greenberg, 553 F. App'x 495 (6th Cir. 2014).
· cites it 8× “Helen Greenberg cross-appealed, maintaining that the applicable statute of limitations that the district court should have imposed was not the six-year breach-of-contract limitations period but the shorter, three-year period provided for in Mich.”
In re Lake Michigan Beach Pottawattamie Resort LLC, 547 B.R. 899 (Bankr. N.D. Ill. 2016).
“Mich. Comp. Laws Ann. § 450.4404 . Therefore, BCL, as a member of a Michigan limited liability company, the Debtor, must consider the interests of the Debtor.”
Chamberlain v. Messer (In re Messer), 500 B.R. 875 (Bankr. E.D. Mich. 2013).
· cites it 2× “During the hearing, the parties requested the opportunity to file briefs to address the relevance of, and impact on the Motions of, Mich. Comp. Laws § 450.4404 (5), and the Court granted this request.”
ArcelorMittal Plate LLC v. Lapeer Indus., Inc. (E.D. Mich. 2021).
· cites it 11× “Schreiber and the Schreiber Trust maintain that only Brentwood has standing to assert a breach of fiduciary duty claim pursuant to Michigan Compiled Section 450.4404 and, to the extent liability is sought pursuant to Michigan Compiled Laws Section 450.”
Domenica Ventimiglia v. Lisa Mancini (Mich. Ct. App. 2022).
· cites it 6× “4515, and alleged that Lisa breached her statutory duty of care under MCL 450.4404 and her common-law fiduciary duty to act “in the best interest of Windemere Group” and to refrain from using her position as manager of the company in a manner that inured to her personal benefit.”
Ivan Frank v. Joshua Linkner (Mich. 2017).
· cites it 3× “4515 and MCL 450.4404 for bringing actions alleging member oppression and breach of fiduciary duty were statutes of repose rather than statutes of limitations and, as such, barred plaintiffs’ claims because none of the alleged wrongful acts occurred after the Series C units were…”
Edward Castle Jr v. Marcia Shoham (Mich. Ct. App. 2018).
· cites it 3× “One is set forth in MCL 450.4404(1), “A manager shall discharge the duties of manager in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the manager reasonably believes to be in the best…”
Edward Castle Jr v. Marcia Shoham (Mich. Ct. App. 2018).
· cites it 3× “One is set forth in MCL 450.4404(1), “A manager shall discharge the duties of manager in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the manager reasonably believes to be in the best…”
— Mich. Comp. Laws § 450.4404(1) — 5 cases
Frank v. Linkner, 871 N.W.2d 363 (Mich. Ct. App. 2015).
“4515 and MCL 450.4404 — as statutes of repose — barred all claims under MCR 2.”
Edward Castle Jr v. Marcia Shoham (Mich. Ct. App. 2018).
“One is set forth in MCL 450.4404(1), “A manager shall discharge the duties of manager in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the manager reasonably believes to be in the best…”
Edward Castle Jr v. Marcia Shoham (Mich. Ct. App. 2018).
“One is set forth in MCL 450.4404(1), “A manager shall discharge the duties of manager in good faith, with the care an ordinarily prudent person in a like position would exercise under similar circumstances, and in a manner the manager reasonably believes to be in the best…”
— Mich. Comp. Laws § 450.4404(2)(a) — 1 case
Altobelli v. Hartmann, 884 N.W.2d 537 (Mich. 2016).
“4401; MCL 450.4404(2)(a) (“In discharging the manager’s duties, a manager may rely on information, opinions, reports, or statements .”
— Mich. Comp. Laws § 450.4404(5) — 1 case
— Mich. Comp. Laws § 450.4404(6) — 1 case
Frank v. Linkner, 871 N.W.2d 363 (Mich. Ct. App. 2015).
“4515 and MCL 450.4404 — as statutes of repose — barred all claims under MCR 2.”
Annotations are extracted automatically from the opinions in the
Syfert caselaw corpus and ranked by authority, recency, and
treatment. Dots show Syfertize treatment of the citing case itself.