NOTICE: All slip opinions and orders are subject to formal 

revision and are superseded by the advance sheets and bound 

volumes of the Official Reports. If you find a typographical 

error or other formal error, please notify the Reporter of 

Decisions, Supreme Judicial Court, John Adams Courthouse, 1 

Pemberton Square, Suite 2500, Boston, MA, 02108-1750; (617) 557-

1030; SJCReporter@sjc.state.ma.us

SJC-12391

W. ROBERT ALLISON vs. ELOF ERIKSSON & others.1

Suffolk. February 5, 2018. - May 30, 2018.

Present: Gants, C.J., Gaziano, Budd, Cypher, & Kafker, JJ.

Limited Liability Company. Damages, Breach of fiduciary duty.

Civil action commenced in the Superior Court Department on 

May 22, 2013.

The case was heard by Mitchell H. Kaplan, J.

The Supreme Judicial Court on its own initiative 

transferred the case from the Appeals Court.

Dana Alan Curhan for the plaintiff.

Sean T. Carnathan for the defendants.

Ben Robbins & Martin J. Newhouse, for New England Legal 

Foundation, amicus curiae, submitted a brief.

KAFKER, J. At issue in the instant case is the remedy 

available for limited liability company (LLC) mergers undertaken 

 

1 Gudrun Eriksson, individually and as trustee of the Elof 

Eriksson Irrevocable Trust-2003; and Karl H. Proppe, 

individually and as trustee of the Elof Eriksson Irrevocable 

Trust-2003.
2

in violation of fiduciary duties. The defendant, Elof Eriksson, 

contends that the exclusive remedy for dissenting members to 

such mergers is the distribution of their interest in the LLC, 

pursuant to G. L. c. 156C, § 60 (b). The plaintiff, W. Robert 

Allison, contends that other equitable relief is available but 

that the judge erred in declining to rescind the merger. We 

conclude that G. L. c. 156C, § 60 (b), provides the exclusive 

remedy for dissenting members of a limited liability company 

that has voted to merge, so long as the merger is undertaken in 

accordance with G. L. c. 156C, §§ 59-63. Of relevance here is 

G. L. c. 156C, § 63 (b), which provides that members of a 

limited liability company owe each other fiduciary duties, but

that such duties may be enhanced or restricted according to the 

terms in the operating agreement. Where, as here, a member of 

an LLC conducts a merger in breach of his fiduciary and 

contractual duties, the merger has not been conducted in 

compliance with § 63, and the remedy provided by G. L. c. 156C, 

§ 60 (b), is not exclusive. Thus, the trial judge did not abuse 

his discretion in fashioning an equitable remedy. We also 

affirm most of the equitable relief awarded, but remand that

portion of the trial judge's decision which increases Allison's 

interest in the merged LLC to five per cent, as we cannot 

discern any basis in the record for that figure.2

 

2 We acknowledge the amicus brief submitted by New England 
3

1. Background. We recite the trial judge's relevant 

findings of fact, supplemented with undisputed evidence from the 

record.

a. Formation and operation of Applied Tissue Technologies. 

Allison is an experienced corporate attorney who left the legal 

field in 1997. Eriksson is the former chief of the division of 

plastic surgery at a hospital in Boston. In 1999, Eriksson was 

looking to start a business based on technology he had developed 

at the hospital. He reached out to Allison, and the two 

eventually agreed to form Applied Tissue Technologies (ATT-MA), 

a Massachusetts LLC. Allison contributed $15,000 to the 

company, and Eriksson contributed $45,000. Allison received a 

twenty-five per cent membership interest in ATT-MA; Eriksson 

received a seventy-five per cent interest. Allison became the 

president and chief executive officer (CEO) of the company.

Allison drafted the initial operating agreement for ATT-MA.3 

It provided that Allison and Eriksson were the only members of 

ATT-MA and that ATT-MA was to be managed by the members, who 

would vote based on their respective membership interests. Any 

additional capital contributions required the unanimous consent 

of all members. The judge found that this requirement "is not 

 

Legal Foundation in support of the defendant.

3 The trial judge found that W. Robert Allison was not 

acting as Elof Eriksson's attorney when Allison drafted the 

operating agreement.
4

uncommon in a joint venture involving two participants who agree 

that they must both consent to certain, fundamental business 

changes, even though they do not have equal interests in the 

profit and loss of the enterprise."

In 2003, Allison and Eriksson each decided to transfer a 

portion of their respective interests in ATT-MA into trusts for 

the benefit of their families. To that end, Allison and 

Eriksson also executed a new operating agreement that was 

lengthier and more sophisticated than the original. It 

contained several important changes: (1) it created a manager 

position, to be elected by voting members; (2) it defined the 

term, "Original Members," as Allison and Eriksson; (3) both 

original members had to agree to the addition of any new 

members; (4) any change to the operating agreement required 

consent from both original members; (5) any change to the 

operating agreement that had the effect of reducing a member's 

interest in ATT-MA or interest in distribution from a sale of 

assets or cash flow required consent from the affected member; 

(6) a vote of at least sixty per cent of the membership was 

required to make significant business decisions. The agreement 

further provided that members were entitled to examine ATT-MA's 

books and records at any and all reasonable times, and that 

members had a duty to conduct company affairs in good faith. 

The new operating agreement also maintained a provision from the 
5

original agreement that required both Allison and Eriksson to 

consent to any further capital contributions. Subsequent to the 

enactment of the new operating agreement, Allison was elected as

manager.

At some point, ATT-MA hired Christian Baker to work as a 

full-time employee. In 2004, Baker received a two per cent 

interest in ATT-MA, transferred from Allison and Eriksson 

according to their twenty-five per cent/seventy-five per cent 

split. By 2007, ATT-MA could not afford to pay Baker, and his 

employment was terminated. A dispute arose between Allison and 

Eriksson about the terms of Baker's termination, which was 

ultimately resolved by Allison transferring two per cent of his 

interest in ATT-MA to Eriksson. After this transfer, the 

membership interests in ATT-MA were as follows: Eriksson owned 

55.5 per cent; Eriksson's family trust owned twenty per cent; 

Allison owned 14.66 per cent; Allison's family trust owned 7.84 

per cent; and Baker owned two per cent.

From 2006 to 2008, Eriksson lent ATT-MA $200,000 to cover 

operating expenses. This sum was later repaid to him with 

fifteen per cent interest. In March, 2010, Allison stepped down 

as CEO, and Karl Proppe, Eriksson's close friend, became the new 

CEO. In November, 2011, Allison resigned as president and 

manager.
6

By January, 2012, ATT-MA was almost out of cash. Eriksson 

was unwilling to lend the company any more money, but indicated 

he would be willing to invest money in exchange for additional 

equity. However, Allison was unwilling to have his interest 

diluted unless the investment came from an outside investor, 

even though the members generally agreed that ATT-MA was at 

least one year away from being able to attract outside 

investors. In response to Allison's stance, Eriksson indicated 

that the operating agreement should be amended.4

Eriksson eventually offered to invest $600,000 if Allison 

invested $200,000, but Allison rejected the proposal. Allison 

also refused to use personal assets to secure a bank loan for 

ATT-MA. Eriksson was frustrated by Allison's position and 

suggested that ATT-MA should be dissolved.

b. The merger. In February, 2012, Eriksson's daughter 

arranged for him to meet with a senior attorney at her firm, 

Gary Schall, to discuss his concerns about the company. They 

ultimately decided that an appraisal of the company was 

necessary. Eriksson and Proppe retained Schall and his firm to 

represent ATT-MA. The judge found that Eriksson, Proppe, and 

 

4 The trial judge explained that Eriksson wanted to amend 

the operating agreement "presumably so that he could invest 

equity over Allison's objection, but [he] was non-specific 

concerning what the amendments should be."
7

Schall all specifically decided not to let Allison know of 

Schall's engagement.

ATT-MA hired a firm to conduct the appraisal. Eriksson 

informed Allison of the appraisal, but not Schall's involvement 

or the purpose of the appraisal. The appraisal firm concluded 

that one hundred per cent of ATT-MA's equity had a value of 

$239,000, but only if $620,000 of additional funding was 

invested; without the additional $620,000, ATT-MA was worth $0.5

In May, 2012, Eriksson and Schall planned how they would

deal with Allison. First, Eriksson would offer to purchase 

Allison's individual and trust membership interests based on the 

appraisal value. If Allison rejected the offer, Eriksson would 

form a new LLC under Delaware law (ATT-DE), and create a new 

operating agreement "that would accomplish Eriksson's goals." 

ATT-MA would then be merged into ATT-DE.

On May 6, 2012, Eriksson offered to purchase Allison's 

collective membership interests, totaling 22.5 per cent, for 

$53,775, i.e., 22.5 per cent of the $239,000 valuation. Allison 

rejected the offer.

 

5 The trial judge noted that the appraisal was "curiously 

principally based on a discounted cash flow valuation, although 

[ATT-MA] had not generated any significant income in the last 

few years, and its only significant assets [were] its 

[intellectual property]." The appraisal company "did not 

consult with anyone who could value [ATT-MA's intellectual 

property]."
8

Later the same month, ATT-DE was created. Proppe, now the 

manager and CEO of both ATT-MA and ATT-DE, executed the 

agreement and plan of merger on May 29, 2012. That evening, 

Eriksson and Proppe informed Allison of the merger. Up to this 

point, Allison had no prior notice of the merger or Schall's 

representation of ATT-MA.

The operating agreement for ATT-DE is significantly 

different from the operating agreement for ATT-MA. The ATT-DE 

operating agreement creates a class of preferred shares with 

liquidation preference over common shares, and establishes a 

board of directors (board) to manage the company.6 Members have 

no rights other than to select the directors of the board.

Directors of the board are elected by members holding a majority 

of the company's outstanding shares. As the holder of the 

majority of the company's shares, Erickson could select the 

directors. As a minority member, Allison would not have the 

ability to successfully elect directors by himself. The 

 

6 Section 6.01 of the ATT-DE operating agreement provides in 

relevant part:

"The business and affairs of [ATT-DE] shall be managed 

by or under the direction of the Board [of Directors], 

which shall have the right, power and authority to exercise 

all of the powers of [ATT-DE] except as otherwise provided 

by law or this Agreement. . . . Except as may be expressly 

provided otherwise elsewhere in this Agreement or pursuant 

to non-waivable provisions of [Delaware's limited liability 

company act], the Members shall have no voting 

rights . . . ."
9

operating agreement also provides that members owe no fiduciary 

duty to ATT-DE or one another, and attempts to limit all other 

duties to the extent permitted by Delaware law.7 Members do not 

have the right to access ATT-DE's books or records, or to 

receive any information about ATT-DE's business or affairs, 

without the board's authorization.8 No membership interest may 

be transferred without board approval, even to family members.

 

7 Specifically, § 6.04(a) of the operating agreement states:

"The Members' respective obligations to each other are 

limited to the express obligations set forth in this 

Agreement, subject only to the implied contractual covenant 

of good faith and fair dealing. No Member shall have any 

duties or liabilities, including fiduciary duties, to [ATTDE] or to any other Member, or to the Board or any 

Director, and the provisions of this Agreement, to the 

extent that they restrict or otherwise modify, or 

eliminate, the duties and liabilities, including fiduciary 

duties, of the Members otherwise existing at law or in 

equity, are agreed by the Members to replace such other 

duties and liabilities of the Members. Any standard of 

care or duty imposed by or under the Act or any other law, 

rule or regulation (or any judicial decision based on or 

interpreting the same) shall be modified, waived or 

limited, to the extent permitted by law, as required to 

permit each Member to act under this Agreement and to make 

any decision such Member is authorized to make hereunder in 

such manner as such Member may determine in his, her or its 

sole and absolute discretion, subject only to the implied 

contractual covenant of good faith and fair dealing." 

(Emphasis added.)

8 Section 7.01 of the operating agreement provides in 

relevant part:

"Except as otherwise expressly provided in this 

Agreement, no Member shall have any right of access to any 

of the books or records of [ATT-DE] or to receive any 

information about the business, affairs, properties or 
10

In the meantime, Eriksson quickly purchased $250,000 of 

preferred shares in ATT-DE. Allison was given the opportunity 

to purchase enough preferred shares of ATT-DE to maintain his 

ownership interest, but declined to do so. Instead, Allison 

challenged the propriety of these transactions. In July,

Allison was denied further access to ATT-MA's offices, which now 

belonged to ATT-DE.

Over the next eighteen months, Eriksson purchased preferred 

shares in ATT-DE, totaling $923,536. As a result, by January,

2014, Allison's combined interests in ATT-DE had been reduced to

only 3.32 per cent. His interests would also be subordinated to 

preferred shareholders' interests in the event of a liquidation.

Allison, Eriksson, Proppe, and Schall met to attempt to 

resolve Allison's claim that Eriksson had committed a breach of

his fiduciary duties by authorizing the merger and purchasing 

preferred shares. Schall asked Allison if he would rather have 

3.32 per cent of an ongoing business or 22.5 per cent of a 

defunct one. Allison responded that he would prefer a larger 

percentage of the failed business.

Eriksson appeared to be willing to amend some of the 

provisions of ATT-DE's operating agreement in Allison's favor. 

 

ownership of [ATT-DE] unless the Board determines, in its 

discretion in compliance with [§ 6.04(b)], to grant such 

access or to provide such information to one or more 

Members."
11

In particular, he seemed willing to provide Allison with access 

to information and the opportunity to confer on decisions 

affecting ATT-DE, as well as a right of first refusal on 

additional investments or the sale of shares. However, Eriksson 

was unwilling to reclassify his own investments as debt and 

restore Allison's prior ownership interests in the company. 

Allison would not agree to any compromise that did not include 

the restoration of his equity without the risk of dilution, 

except from a third-party investment.

Eriksson's son-in-law, Michael Broomhead, became CEO of 

ATT-DE in November, 2012. Broomhead actively looked for 

investors without success. Broomhead invested $10,000 in ATT-DE 

and Proppe invested $30,000.

In May, 2013, Allison brought suit against Eriksson, 

Eriksson's wife, and Proppe, seeking a preliminary injunction of 

the merger. The motion judge ordered ATT-DE to allow Allison to 

examine its books and records at reasonable intervals, but 

otherwise denied the preliminary injunction.

In his complaint, Allison brought claims for breach of 

contract, intentional interference with advantageous relations, 

breach of fiduciary duty, civil conspiracy, and declaratory 

judgment. After a jury-waived trial, Allison prevailed on his 

claim against Eriksson for breach of fiduciary duty, but lost on 
12

all other claims.9 The judge granted equitable relief, ordering

the following amendments to the operating agreement of ATT-DE:

(1) the rescission of § 6.01, such that members shall have 

voting rights as provided under Delaware law; (2) the rescission 

of § 6.04 to the extent that it eliminated members' fiduciary 

duties to one another, and to directors, officers, and 

shareholders; (3) the rescission of the first two sentences of 

§ 7.01, such that members may access the company's books and 

records; (4) the addition of a provision requiring the directors 

to "report to Allison either orally or in writing on the 

business and affairs of" ATT-DE, to timely advise him of 

anticipated extraordinary business events, and to provide him 

with a copy of ATT-DE's annual financial statements, if any. 

The judge also ordered that the combined membership interest of 

Allison and the Allison Trust be "grossed up" to five per cent 

and not be subject to dilution without a bona fide outside 

investment. Any such dilution must be on the same terms as 

holders of common or preferred shares of ATT-DE. If ATT-DE 

should be liquidated before receiving any outside investment, 

Allison's interest must be "treated pari passus with the 

preferred shareholders."

 

9 Allison did not appeal from the judgment on any of these 

other claims.
13

The parties cross-appealed. We transferred the appeals to 

this court on our own motion.

2. Discussion. a. Relevant provisions of G. L. c. 156C. 

We must first determine whether distribution is the exclusive 

remedy for a minority shareholder of an LLC who has objected to 

a merger that breaches fiduciary duties. The governing 

provision is G. L. c. 156C, § 60 (b). Where a minority member 

objects to the merger, but the majority of members vote to merge 

anyway, G. L. c. 156C, § 60 (b), provides:

"The exclusive remedy of a member of a domestic 

limited liability company, which has voted to consolidate 

or to merge with another entity under the provisions of 

[G. L. c. 156C, §§ 59-63], inclusive, who objects to such 

consolidation or merger, shall be the right to resign as a 

member and to receive any distribution with respect to his 

limited liability company interest, as provided in [G. L. 

c. 156C, §§ 31-37], inclusive. Such members and the 

resulting or surviving entity shall have the rights and 

duties, and shall follow the procedure set forth in said 

sections."

For questions of statutory interpretation, we look first to 

the text of the statute. Phillips v. Equity Residential Mgt., 

L.L.C., 478 Mass. 251, 257 (2017). In so doing, we must examine 

"the language of the entire statute, not just a single sentence"

or phrase, "and attempt to interpret all of its terms 

'harmoniously to effect the intent of the Legislature.'" Id., 

quoting Commonwealth v. Hanson H., 464 Mass. 807, 810 (2013). 

Here, the statute expressly provides for distribution of the 

dissenting member's interest in the LLC as an exclusive remedy 
14

where an LLC has voted to merge "under the provisions" of G. L. 

c. 156C, §§ 59-63. We must therefore consider the requirements 

of the cross-referenced sections, particularly § 63, to 

understand the scope of the exclusive remedy provision.10,11

General Laws c. 156C, §§ 59-62, address the mechanics and 

consequences of merging or consolidating an LLC. By contrast,

G. L. c. 156C, § 63, defines the scope of a member's or 

 

10 We note that unlike G. L. c. 156D, the Commonwealth's 

most recent business corporations statute, which provides 

detailed commentary from its drafters, the legislative history 

on G. L. c. 156C is less clear. See Halebian v. Berv, 457 Mass. 

620, 624-625 (2010), and authorities cited. The authors of 

G. L. c. 156C took guidance from a number of sources, including 

the existing corporate statutes, the Massachusetts Uniform 

Limited Partnership Act, other States' limited liability company 

(LLC) statutes, and the American Bar Association (ABA) Prototype 

LLC Act. Parker, The Limited Liability Company: An 

Introduction, 39 Boston B.J. 8, 12 (1995). However, the 

language in G. L. c. 156C, § 60 (b), does not appear to be taken

from a single source. The ABA's Prototype LLC Act does not even 

provide a distribution remedy for mergers. See American Bar 

Association, Working Group on Prototype Act, Prototype Limited 

Liability Company Act, at § 1202 commentary, at 88 (Nov. 19, 

1992). The Massachusetts Uniform Limited Partnership Act does 

not contain "exclusive remedy" language. See G. L. c. 109, 

§§ 1A, 16A. As Eriksson points out, the then most recent 

business corporations statute, G. L. c. 156B, contains an 

"exclusive remedy" provision, but provides an exception for 

"illegal or fraudulent" corporate actions. See G. L. c. 156B, 

§ 98.

11 Eriksson asserts that interpreting G. L. c. 156C, § 60 

(b), in reference to G. L. c. 156C, § 63, is barred by the fact 

that Allison did not make this particular statutory 

interpretation argument below. Although Allison did not 

explicitly rely on G. L. c. 156C, § 63 (b), below, he did raise 

the issue of how § 60 should be constructed and thus the issue 

is properly before us. See Wilcox v. Riverside Park Enters., 

Inc., 399 Mass. 533, 535 n.5 (1987).
15

manager's duties and liabilities. Specifically, § 63 (b) 

states:

"To the extent that, at law or in equity, a member or 

manager has duties, including fiduciary duties, and 

liabilities relating thereto to a limited liability company 

or to another member or manager, (1) any such member or 

manager acting under the operating agreement shall not be 

liable to the limited liability company or to any such 

other member or manager for the member's or manager's good 

faith reliance on the provisions of the operating 

agreement, and (2) the member's or manager's duties and 

liabilities may be expanded or restricted by provisions in 

the operating agreement."

This provision establishes the rules governing fiduciary and 

contractual duties in LLCs, including the fiduciary duties 

applicable to mergers. The subsection's opening statement about

"[t]o the extent that" such duties exist "at law or in equity,"

is best read as an acknowledgement that the courts define and

determine the nature of such duties, and that the courts provide 

for their enforcement as default rules. See Piemonte v. New 

Boston Garden Corp., 377 Mass. 719, 723 (1979) (consideration of 

Delaware judicial decisions appropriate where Massachusetts's 

provision is based on similar Delaware statute); Feeley v. 

NHAOCG, LLC, 62 A.3d 649, 661-662 (Del. Ch. 2012) (court 

interpreting analogous phrase in Delaware's LLC statute 

concluded Legislature was not "agnostic" about existence of 

fiduciary duties but recognized that they do exist).12 See also 

 

12 General Laws c. 156C, § 63 (b), appears to be taken

almost verbatim from the 1992 version of Delaware's LLC 
16

R.W. Southgate & D.W. Glazer, Massachusetts Corporation Law and

Practice § 19.4 (2d ed. 2012 & Supp. 2018) ("better reading [of 

'to the extent' clause] is . . . to leave the fiduciary duties 

of members and managers to the courts to define over time").

The LLC statute further allows, however, for the modification of 

these duties. According to § 63 (b), such duties and 

liabilities "may be expanded or restricted by provisions in the 

operating agreement." This recognizes that "[a]n LLC is 

primarily a creature of contract, and the parties have wide 

contractual freedom to structure the company as they see fit." 

Seneca Invs. LLC v. Tierney, 970 A.2d 259, 261 (Del. Ch. 2008). 

Additionally, § 63 (b) provides that a member's or manager's 

good faith reliance on the operating agreement provides a 

defense to liability.

The merger here was done in contravention of the duties

recognized in § 63 (b) and does not fall under the good faith 

defense provision. As the trial judge correctly found, Eriksson 

 

fiduciary duty provision, Del. Code Ann. tit. 6, § 18-1101 (c)

(2013). Delaware's LLC Act has since been amended to allow LLCs 

to eliminate fiduciary duties, but our interpretation of § 63

(b) remains consistent with the Delaware Chancery Court's

interpretation that the LLC fiduciary duty provision provides 

for the existence of fiduciary duties, and their enforcement as 

default rules in the absence of contractual modification. See 

Feeley v. NHAOCG, LLC, 62 A.3d 649, 661-663 (Del. Ch. 2012); 

Auriga Capital Corp. v. Gatz Props. LLC, 40 A.3d 839, 851 (Del. 

Ch. 2012).
17

clearly committed a breach of his fiduciary duties. Indeed,

this is undisputed on appeal.

Although § 63 (b) provided Allison and Eriksson the ability 

to restrict members' and managers' duties, they chose instead to 

expand them. ATT-MA's operating agreement expressly prohibited 

many of the consequences of this merger, such as the ability to 

dilute a member's interest without that member's consent, the 

ability to amend the operating agreement without the original 

members' consent, and the ability to cut members out of the 

management of the company. Thus, Eriksson was not acting in

good faith reliance on the operating agreement when he conducted 

the merger in secret, so as to subvert each of these explicit 

protections.

The many minority protections provided in ATT-MA's 

operating agreement also indicate that the company was set up to 

establish protections akin to those provided at law to a close 

corporation.13 Because close corporations often involve a small 

number of owners, who are "quite dependent on one another for 

the success of the enterprise[,] . . . the relationship among 

the stockholders must be one of trust, confidence and absolute 

 

13 A closely held corporation is defined as having (1) a 

small number of shareholders; (2) no ready market for the 

corporation's shares; and (3) substantial majority shareholder 

participation in the management, direction, and operations of 

the corporation. See Brodie v. Jordan, 447 Mass. 866, 868-869 

(2006), quoting Donahue v. Rodd Electrotype Co. of New England, 

Inc., 367 Mass. 578, 586 (1975).
18

loyalty if the enterprise is to succeed." Donahue v. Rodd 

Electrotype Co. of New England, Inc., 367 Mass. 578, 587 (1975).

The nature of these close corporations imposes a duty of "utmost 

good faith and loyalty" (citation omitted). Id. at 593. The 

minority protections in ATT-MA's operating agreement established 

an analogous relationship and duty among its members, and thus, 

the close corporation doctrine, and the strict fiduciary duty it 

imposes, applies here.14

The trial judge correctly found that "Eriksson certainly 

did not act with utmost good faith toward Allison." Eriksson 

does not challenge this finding, nor could he. Eriksson 

initiated the merger in secret, acting covertly in order to 

dilute Allison's interest in the company and remove Allison's 

minority rights, which were both expressly protected by ATT-MA's 

operating agreement.

As we have explained, "the danger of abuse of fiduciary 

duty is especially great in a freeze-out merger." See Coggins

v. New England Patriots Football Club, Inc., 397 Mass. 525, 534 

(1986), S.C., 406 Mass. 666 (1990). In close companies and 

close corporations, such freeze-outs defeat "the reasonable 

 

14 Not all LLCs are close companies. The test for whether a 

corporation is closely held, see note 13, supra, is not 

dispositive for determining whether an LLC is closely held. As 

LLCs are creatures of contract, determining whether an LLC is 

closely held is a more fact-specific determination that will 

depend on the way in which a particular LLC is structured.
19

expectations" of minority shareholders. See Pointer v. 

Castellani, 455 Mass. 537, 550 (2009). Here we have such a 

freeze-out merger.

In sum, we are presented with a merger that clearly 

contravenes the fiduciary and contractual duties recognized in 

§ 63 (b). The question that remains is whether such a merger

may still be characterized as a merger "under the provisions of 

[G. L. c. 156C, §§ 59-63]," and therefore be covered by the 

exclusive remedy provision of § 60 (b). We conclude that it 

cannot for the following reasons.

First, the exclusive remedy provision is expressly limited 

to mergers conducted "under the provisions of [G. L. c. 156C, 

§§ 59-63]." It would be anomalous to treat a merger conducted 

in contravention of the fiduciary and contractual duties 

identified in § 63 (b) as a merger "under" § 63. This is 

especially true given the great flexibility provided to LLCs by 

statute either to restrict or enhance duties. Here, instead of 

restricting fiduciary duties, the operating agreement structured 

the LLC as a closely held company designed to prevent the very 

freeze-out accomplished by the merger.

We also have held that "a freeze-out merger in technical 

compliance" with G. L. c. 156B or 156D does not divest the 

courts of their equitable jurisdiction, and shareholders who 

dissented to the merger "are not limited to the statutory remedy 
20

of judicial appraisal [and distribution]," where the majority 

has violated its fiduciary duties. See Coggins, 397 Mass. at

532 & n.13, 533. See also G. L. c. 156D, § 13.02 (e) 

(preserving Coggins holding for corporations formed under G. L. 

c. 156D). We conclude that the same principles apply here

given how Erickson and Allison structured the LLC, imposing 

contractual and fiduciary duties on each other, including those 

designed not to allow the freeze-out and cash-out of one by the 

other.

Eriksson argues that G. L. c. 156C, § 60 (b), must 

nonetheless be the exclusive remedy here because, unlike G. L. 

c. 156B, § 98, or G. L. c. 156D, § 13.02 (e), the two business 

corporation statutes discussed supra, it does not contain an 

explicit exception for illegal or fraudulent corporate actions. 

However, Eriksson's interpretation ignores § 60 (b)'s crossreference and incorporation of § 63 (b) and the fiduciary and 

contractual duties and defenses it defines. As we have 

explained, a merger in violation of the duties and defenses 

established in § 63 (b) is not a merger "under" § 63. Although 

compliance with § 63 (b) is a precondition rather than an 

exception to § 60 (b), it serves the same purpose as the 

exceptions found in G. L. c. 156B and G. L. c. 156D.

Finally, we conclude that if it was the Legislature's 

understanding that merger would provide a unilateral means for 
21

majority members to extinguish fiduciary duties and freeze out 

minority members from LLCs, it would have said so expressly.

Although we recognize that the scope of the exclusivity 

provision for LLC mergers could have been more clearly written, 

we conclude that the Legislature would not have intended to 

create anything less than a transparent means of extinguishing

fiduciary duties and freezing out minority members. See 

Gevurtz, Squeeze-Outs and Freeze-Outs in Limited Liability 

Companies, 73 Wash. U.L.Q. 497, 533 (1995) ("even if majority 

expulsion is the better default rule, it should be explicit in 

the statute rather than hidden in merger provisions").

Thus, we hold that in this case, where the merger of an LLC 

constitutes a breach of fiduciary and contractual duties in 

contravention of G. L. c. 156C, § 63 (b), G. L. c. 156C, 

§ 60 (b), does not prevent the courts from providing the 

dissenting members with an equitable remedy other than the 

statutory right of distribution. See Coggins, 397 Mass. at 532 

& n.13, 533. Thus, a majority member may not rely on § 60 (b) 

to exclude all other equitable relief when he or she has 

initiated a merger in breach of his or her existing fiduciary 

and contractual duties.

b. Propriety of the remedy. The proper remedy for a 

freeze-out merger is one that "will put [the minority member] in 

the position he would have been in had the freeze-out not 
22

occurred, and compensates him for the denial of his reasonable 

expectations." Pointer, 455 Mass. at 560. See Brodie v. 

Jordan, 447 Mass. 866, 870-871 (2006) (remedy for freeze-out 

"should, to the extent possible, restore to the minority 

shareholder those benefits which she reasonably expected, but 

has not received because of the fiduciary breach"). This 

"remedy should neither grant the minority a windfall nor 

excessively penalize the majority." Id. at 871. The remedy 

must also take into account the passage of time and changed 

circumstances. See Coggins, 397 Mass at 536. The LLC merger 

egg may not always be unscrambled. Courts therefore have broad 

equitable powers in specifying the appropriate remedy, and their 

choice of remedy is reviewed for abuse of discretion. See 

Brodie, supra at 871.

Here, the trial judge carefully crafted an equitable 

remedy, amending specific provisions in ATT-DE's operating 

agreement that had diminished Allison's rights. The judge's 

amendments recreate Allison's minority member protections to the 

largest extent possible under Delaware law, within the existing 

structure of ATT-DE. Despite this, Allison insists that the 

only appropriate remedy was to rescind the merger and restore 

Allison's interest in ATT-MA. We disagree.

A judge need not order rescission of a freeze-out merger if 

it would not be in the best interest of the company. See 
23

Coggins, 397 Mass. at 536. This litigation has gone on for five 

years, and concerns a merger that occurred six years ago. See 

id. (rescission of merger not equitable where litigation lasted 

many years and prior position of parties was difficult to 

restore). Despite being a sophisticated corporate attorney, 

Allison waited seven months after settlement negotiations had

ended to file suit. By that point, the merger had been in place 

for nearly one year and Eriksson had already invested over 

$500,000 in ATT-DE. Rescinding the merger and backing out 

Eriksson's additional equity six years later would be 

complicated and inequitable. Further, the merger was 

precipitated by Allison's refusal to invest additional money in 

ATT-MA while preventing Eriksson from making capital 

contributions. Indeed, the trial judge found that "Allison's 

position that he would not invest anything more in [ATT-MA] or 

secure its debt with personal assets, while simultaneously 

asserting his right against diluting his interest, does not 

appear consistent with his own fiduciary responsibilities to 

Eriksson." Under these circumstances we discern no abuse of 

discretion in the judge's decision to amend ATT-DE's operating 

agreement to restore Allison's minority protections instead of 

rescinding the merger. See Demoulas v. Demoulas, 432 Mass. 43, 

67 (2000), quoting Clark v. Greenhalge, 411 Mass. 410, 417 

(1991) ("one who seeks equity must do equity and . . . a court 
24

will not permit its equitable powers to be employed to 

accomplish an injustice").

In addition to amending ATT-DE's operating agreement, the 

judge increased Allison's ownership interest to five per cent. 

Any such equitable change to Allison's ownership interest in 

ATT-DE should, in combination with the amendments to ATT-DE's 

operating agreement, "attempt to reset the proper balance 

between the majority's 'concede[d] . . . rights to what has been 

termed 'selfish ownership,' . . . and the minority's reasonable 

expectations of benefit from its shares." Brodie, 447 Mass. at 

871, quoting Wilkes v. Springside Nursing Home, Inc., 370 Mass. 

842, 850-851 (1976). Here, however, the judge did not explain 

how he settled on the five per cent figure. The only potential 

basis for this increase that we can identify in the record is 

Allison's transfer of two per cent of his interest to Eriksson 

after their disagreement over Baker's termination. Yet the 

judge's findings do not explain whether this was the reason for 

increasing Allison's interest. Further, a two per cent increase 

would give Allison a 5.32 per cent interest in the company, not 

five per cent exactly. Accordingly, we deem it appropriate to 

remand this matter on the question whether and to what extent 

Allison's interest in ATT-DE should be increased, and the 

reasons for any increase provided. See Pointer, 455 Mass. at 
25

560 (remand ordered where appropriate remedy depended on further 

fact finding).

3. Conclusion. For the reasons discussed, the judgment 

below is affirmed, except with respect to the issue of Allison's 

ownership interest percentage in ATT-DE. We remand to the 

Superior Court for further explanation on the propriety of 

increasing Allison's interest to five per cent.

So ordered.