Background
Voletta Wallace and Faith Evans, the mother and widow of Christopher Wallace, also known as The Notorious B.I.G., formed Notorious B.I.G., LLC to manage the late rapper’s intellectual property. Each held half of the company’s membership units. Their amended LLC agreement expressly identified the Voletta Wallace Revocable Trust as a “Permitted Transferee.”
Shortly before her death in 2025, Voletta amended the trust to remove her grandson and another individual as successor trustees, leaving Wayne Barrow as sole trustee. After Voletta died, Evans disputed the trust’s membership status and stopped making distributions to it. Barrow sued for declarations that the trust was a member and entitled to distributions, among other relief. He later executed a written consent on the trust’s behalf assuming all of Voletta’s rights and obligations under the LLC agreement.
The Court’s Holding
The Court of Chancery granted Barrow summary judgment on his claims that the trust was a member of Notorious B.I.G., LLC and was entitled to distributions. It also dismissed the defendants’ mirror-image counterclaim seeking a declaration that the trust was not a member.
The court held that the LLC agreement’s transfer provision allowed a member to transfer all membership units, including the associated membership rights and obligations, to a Permitted Transferee without the unanimous approval otherwise required for admitting new members. The trust remained the same Permitted Transferee identified in the LLC agreement despite Voletta’s amendment of the trust instrument. Barrow’s written consent also objectively satisfied the agreement’s requirement that the transferee execute an instrument reasonably satisfactory to the manager assuming the transferring member’s rights and obligations.
Key Takeaways
- An LLC agreement may permit a designated transferee to receive full membership status without complying with a general provision requiring unanimous approval for new members.
- Amending a revocable trust does not, without more, create a different trust or deprive it of expressly granted transferee status.
- A requirement that an assumption instrument be “reasonably satisfactory” to a manager is judged objectively and does not give the manager an unrestricted veto.
Why It Matters
The decision illustrates how Delaware courts harmonize general member-admission provisions with more specific transfer provisions in LLC agreements. When an agreement authorizes the transfer of all units and their associated rights and obligations to a named Permitted Transferee, a manager cannot invoke a general unanimous-consent provision to defeat that transfer.
It also underscores the importance of drafting explicit restrictions if parties intend amendments to a trust, changes in trustees, or changes in beneficiaries to affect the trust’s eligibility as a permitted transferee.