Court of Chancery Holds Trust Became Member of Notorious B.I.G., LLC Under Permitted Transferee Provision and Rejects Attempt to Stay Delaware Action
Barrow v. Evans, C.A. No. 2025-0760-KSJM (August 7, 2026)
In this case, the Court of Chancery addressed whether the Voletta Wallace Revocable Trust (the “Trust”) became a member of Notorious B.I.G., LLC (the “LLC”) following the death of Voletta Wallace, mother of the late rapper Christopher Wallace, also known as The Notorious B.I.G. The dispute required the court to interpret provisions of the LLC Agreement governing the admission of new members and transfers. Granting partial summary judgment in favor of Wayne Barrow (“Barrow”), the Trustee of the Trust, the court held that the Trust was a member of the LLC because it was expressly identified as a “Permitted Transferee” and satisfied the requirements for transfer under the LLC Agreement. The court also dismissed the mirror-image counterclaim brought by Faith Evans (“Evans”) and the LLC (together, the “Defendants”), which sought a declaration that the Trust was not a member.
The LLC was formed under Delaware law in 2007 by Voletta and Evans, Christopher Wallace’s mother and widow, respectively, to manage his intellectual property. Under the LLC Agreement, Voletta and Evans each owned fifty percent of the membership units. Section 8.1 of the LLC Agreement permits a member to assign or transfer its membership units, directly or indirectly, to a “Permitted Transferee” that “executes an instrument in form and substance reasonably satisfactory to the Manager, assuming the rights and obligations of such Member under [the LLC] Agreement.” The LLC Agreement expressly identified the “Voletta Wallace Revocable Trust u/a/d December 14, 2020” as a Permitted Transferee. Section 5.3 of the LLC Agreement provides that “[s]ubject to the terms and conditions of [the LLC] Agreement,” a new member may be admitted at any time by unanimous vote of the existing members, upon such terms and conditions as the members agree.
Voletta established the Trust in December 2020 and initially named her grandson, Christopher Jordan Wallace, along with Carol Sampson and Barrow as successor Trustees. In February 2025, shortly before her death, Voletta amended the Trust Agreement to remove Christopher Jordan Wallace and Carol Sampson as successor Trustees, leaving Barrow as sole Trustee. Following Voletta’s death, Evans became the sole manager of the LLC and stopped making distributions to the Trust, disputing its membership status. Barrow filed suit seeking, among other relief, declarations that the Trust is a member of the LLC and is entitled to distributions. He subsequently moved for partial summary judgment and to dismiss Defendants’ mirror-image counterclaim.
The parties’ first dispute focused on the interpretation of Sections 5.3 and 8.1 of the LLC Agreement. Barrow argued that the Trust became a member under Section 8.1 because it was expressly identified as a Permitted Transferee and satisfied the requirements for a transfer of Voletta’s membership interest. Defendants argued that compliance with Section 8.1 was insufficient because Section 5.3 separately required unanimous consent of the existing members before the Trust could become a member. Without such consent, they argued, the Trust was merely an assignee of Voletta’s interest and did not obtain membership, governance, or distribution rights.
The court rejected Defendants’ interpretation, concluding that Section 5.3 did not establish the exclusive means of becoming a member because that provision was expressly made “subject to” the other terms and conditions of the LLC Agreement. By contrast, Section 8.1 specifically governed transfers to Permitted Transferees and contained no such qualifier. Reading the provisions together, the court concluded that Section 8.1 governs admission through transfer to a Permitted Transferee, while the more general Section 5.3 governs admission of other new members.
The court next addressed whether Barrow demonstrated that the Trust was a Permitted Transferee and had executed a transfer instrument that was reasonably satisfactory to the Manager. Defendants argued that Voletta’s 2025 amendments created a different trust from the one identified in the LLC Agreement. The court rejected that argument, explaining that amending a trust agreement does not create a new legal entity. The court further found that the inclusion of “u/a/d December 14, 2020” after the Trust’s name did not limit Permitted Transferee status to the Trust as governed by the original, unamended Trust Agreement, particularly since the Trust Agreement expressly allowed Voletta to amend or revoke the Trust, including by changing its Trustees, and Evans was on notice of such provision when she agreed to include the Trust as a Permitted Transferee. The court concluded that if the parties intended for amendments to affect the Trust’s Permitted Transferee status, they could have said so in the LLC Agreement. The court also rejected Defendants’ argument that the Trust’s ultimate beneficiary had to be a Permitted Transferee because the transfer at issue was to the Trust itself, not its beneficiary.
Next, the court found that Barrow’s written consent agreeing to assume all the rights and obligations held by Voletta under the LLC Agreement (the “Written Consent”) satisfied Section 8.1. Defendants argued the Written Consent was insufficient because Evans, as manager of the LLC, had not reviewed or approved its form or substance. However, the court found Section 8.1 did not require her approval. Instead, the “reasonably satisfactory” requirement imposed an objective standard requiring the court to make an objective determination of what “‘a reasonable person would believe,’ rather than deferring to the good faith judgment of Evans.” Because the Written Consent expressly stated that the Trust assumed Voletta’s rights and obligations under the LLC Agreement, the court found it satisfied Section 8.1.
In a separate order issued the same day, the court denied Defendants’ motion to stay pending resolution of litigation in Pennsylvania Orphans’ Court. That suit, filed by Christopher Jordan Wallace, challenged Barrow’s authority to act on behalf of the Trust and Voletta’s estate. Defendants argued a stay was warranted because Barrow’s claims depended on his status as the Trust’s sole Trustee and the estate’s sole executor. The court disagreed, finding that Barrow had already accepted his appointment as successor Trustee and that Pennsylvania law did not suspend his authority merely because it was being challenged. The court further explained that Barrow’s subsequent removal would not necessarily invalidate actions taken while he possessed that authority. Finally, the court found the Pennsylvania suit did not create a factual dispute concerning the Trust’s LLC membership because Voletta’s units passed to the Trust under both the original and amended estate plans.
For Delaware practitioners, this decision offers two key takeaways. First, the decision illustrates the legal effect of “subject to” language in LLC agreements and other legal documents: where a general provision is made “subject to” other terms in an agreement, a more specific provision governing a particular circumstance may control. Here, Section 5.3’s general membership admission requirements yielded to Section 8.1’s specific provisions governing transfers to Permitted Transferees. Second, the decision confirms that amendments to a trust do not create a new trust but instead continue to identify the same trust. Accordingly, absent express limiting language, a trust identified as a Permitted Transferee in an LLC agreement retains that status notwithstanding subsequent amendments to the trust agreement. The decision also underscores the court’s willingness to impose objective standards when evaluating the “reasonable satisfaction” of LLC instruments.
