Pub. 2 Issue 1

8 9 www.glancda.org SPRING 2014 NADA Defends In-Dealer- ship Financing Despite an auto sales turnaround over the past year, new-car dealers still face major industry and regulatory challenges. In 2013, the industry faced a new threat to dealer-assisted financ- ing and one of the industry’s core business models. NADA con- tinues to defend in-dealership financing and educate legisla- tors and the public regarding how enormously successful it has been at increasing access to auto credit, and reducing the cost for millions of Americans. NADA also continues to point out that consumers overwhelmingly choose dealer-assisted financ- ing because it’s convenient and affordable. NADA: Rising Home Values, Residential Construction and Employment to Boost Auto Sales Increasing home values, residential housing construction and rising employment are key factors that will drive the U.S. economy this year according to NADA Chief Economist Ste- ven Szakaly. These factors are critical to maintaining the pace of auto sales growth, which has been an integral part of the nation’s economic recovery. NADA predicts 16.4 million new cars and light trucks will be purchased or leased in the U.S. this year, a 5.8 percent increase from 2013. NADA Used Car Guide: Used Vehicle Prices to Slip in 2014 A sharp rise in the supply of late-model used cars and light trucks is expected to end a five-year run of price growth, ac- cording to the NADA Used Car Guide. Late-model used vehicle supply will be more plentiful, in large part due to an 18 percent surge in off-lease volume. The supply of units six to eight years in age, though, will continue to fall as a byproduct of the new-vehicle sales decline from 2006 to 2009. These trends may result in late-model used-vehi- cle prices dropping more substantially than older vehicles. In the near-term, however, NADA’s used-vehicle price index remained unchanged at 124.6, tied with August 2013 and De- cember 2013 as the third-highest figure ever recorded. The index measures the change in used-vehicle prices up to eight- years-old. According to staff at NADA Used Car Guide, the harsh weather that impacted a large portion of the country in January and February had little impact on used-vehicle prices. Compact utility, large SUV and mid-size van prices dropping slightly, while compact car, large pickup and mid-size utility prices inched up; and mid-size car prices were flat over the month.  Start to Finish Direct Mail Solutions Denise Mitchell 714-402-4427 | 866-434-6906 www.idealdirectadgroup.com No Matter Who You Target... Some of our specialized markets include: Expiring Leases, KBB Year Make Model with Book Value and Pre-Approvals. We know the CaliforNia market, because we are in CaliforNia . Call Us Today for a personal introduction on how we can improve your Direct Mail ROI. California’s New Limited Liability Company Act E ffective January 1, 2014, all California limited liability companies, including those already in existence, became subject to the newly enacted California Revised Uniform Limited Liability Company Act, popularly known as “RULLCA.” Much of the substance of RULLCA is similar to the current law in effect in California which governs limited liability companies, but there are a number of substantive changes. RULLCA furnishes more detail regarding the withdrawal of an LLCmember from the LLC (including the death of the member) and the consequences of such withdrawal. It also modifies the default member voting rights. The new act adds detailed provisions concerning which sec- tions of the law can be, and which cannot be, overridden by the operating agreement. One of the primary characteristics of a limited liability company, and one of its potential advantages over a corporation, is flexibility in the structure of the entity and the relative rights and responsibilities of the members and, if manager-managed, the manager and the members. While the structure of a corporation is for the most part dictated by the California Corporations Code (the “Code”), the rules for limited liability companies under the Code are in most instances subject to modification in the “operating agreement” of the company. While both the old California limited liability company act and RULLCA provide for certain issues which are not subject to modification in the operating agreement, or are subject to modification only under certain circumstances, RULLCA has made changes which could well impact existing companies. One of the more significant aspects of RULLCA is the modifi- cation of rules concerning the fiduciary duties of members and managers. Although it preserves the standard in existing law governing the duty of care (essentially, a gross negligence stan- dard), it adds detailed provisions regarding the duty of loyalty. The rules regarding the duty of loyalty relate to 1) the duties owed by members to the company and one another in the case of a member-managed LLC, and 2) the duties owed by the manager and the members to the company and the other members in the case of a manager-managed LLC. While the fiduciary duties of a manager to the company and to the members may be modified, they may only be modified in a written operating agreement with the informed consent of the members. Merely assenting to the operating agreement does not constitute informed consent. In a member-managed LLC, each member must account to the company and hold as trustee for the company any property, profit, or benefit derived in the conduct of the activities of the company, including the appropriation of a company opportunity. The member must also refrain from dealing with the company as or on behalf of a party having an interest adverse to the company, and refrain from competing with the company in its activities. In a manager-managed LLC, the obligation of good faith and fair dealing applies to both the manager and the members.  NADA Director’s Update — continued from page 7 BY NA NCY C. FERRUZZO, FERRUZZO & FERRUZZO LLP  Company Act — continued on page 10