New York appellate case law invariably holds that a closely-held business owner lacks a direct property interest or right in the entity’s underlying real estate asset to support a Notice of Pendency. But in this week’s New York Business Divorce, we feature an uncommon motion court decision declining to vacate a Notice of Pendency placed by an LLC member upon the entity’s real estate asset to thwart the property’s sale to a third-party buyer. Is this recent decision an outlier, or the birth of an exception to the rule?
The Pick-Your-Partner Principle
General partnerships are supposed to be the easiest of all business organizations for co-owners to separate. Not in the case featured on this week’s New York Business Divorce, where it took almost ten years for the majority partners of a New York general partnership to secure a court ruling that a formal written notice of withdrawal by one of the partners dissolved the business by operation of law.
Mere Assignment of an LLC Membership Interest Does Not Make You a Member
Hoping to derive standing to sue from an LLC membership interest assignment? This week’s New York Business Divorce is another reminder that assignment of a membership interest does not convey actual membership status, with all the coveted legal rights flowing therefrom, unless the operating agreement grants the assignor such power, and, then, only where the assignor and assignee comply with all the conditions of the contract for admission of a new member. Anything less can result in total litigation defeat.
Continue Reading Mere Assignment of an LLC Membership Interest Does Not Make You a Member
Is Choice of Law an Issue of Fact?
Cross-border business divorce disputes continue to bedevil New York’s commercial courts, forcing them to grapple with difficult conflicts-of-laws questions. We feature the latest instance on this week’s New York Business Divorce.
Indecision Has a Price: Withdraw Lawsuit, Pay Hefty Fee Award
After three years of litigation, can a petitioner abruptly withdraw a business dissolution proceeding without consequences? A recent decision from Justice Reed in the New York County Commercial Division answers that question with a decisive “No.”
Continue Reading Indecision Has a Price: Withdraw Lawsuit, Pay Hefty Fee Award
How Easily Can an Operating Agreement Supplant the Default Rule for LLC Manager Removal? Pretty Easily.
This week on New York Business Divorce, read about the interplay between statutory and contract rules for LLC manager removal or expulsion, set within an appeal from a trio of decisions we wrote about what feels like a lifetime ago.
Roller Coaster Ride: Interlocutory Appeals in Business Divorce Cases
In New York civil practice, appeals from non-final orders, called interlocutory appeals, have the awesome power to transform a case before its conclusion, snatching defeat from the jaws of victory, and vice versa. Read about one such instance in this week’s New York Business Divorce.
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Seller Beware: The “Exclusive” Fair Value Appraisal Remedy Really is Exclusive
How exclusive is the “exclusive” fair value appraisal remedy of Business Corporation Law § 623? So exclusive, according to the Second Department, that the statute bars a shareholder who consented to an asset sale from suing the other shareholder for making off with the sale proceeds after the closing. Let’s unpack this harsh result in this week’s New York Business Divorce.
Continue Reading Seller Beware: The “Exclusive” Fair Value Appraisal Remedy Really is Exclusive
Hoping to Take Assignment of an LP or LLC Interest? Best Read the Contract
A recent decision from one of our favorites, Albany County Commercial Division Justice Richard M. Platkin, is a reminder to would-be assignees of limited partnership interests that without total compliance with the terms and conditions of the partnership agreement, an attempted assignment conveys only economic rights (i.e., the right to distributions, profits, and losses), but not voting or management rights, even if both sides to the assignment genuinely intended transfer of all ownership rights.
Although not an LLC case, the concept of Marini v Marini Realty LP (2025 NY Slip Op 51138[U] [Sup Ct, Albany County July 2, 2025]), applies equally to LLC members: to become a full-blown equity holder with all attendant rights and privileges, compliance with the governing contract (or if none, the default rules under the Partnership Law and Limited Liability Company Law) is essential. Standard language in such contracts requires unanimity for admission of new equity owners. After all, who wants to take on a new partner without one’s consent? Less than total compliance conveys only economic benefits, not voting or management rights.Continue Reading Hoping to Take Assignment of an LP or LLC Interest? Best Read the Contract
A Tardy Plaintiff’s Best Friend: The Open Repudiation Doctrine
Pre-answer motions to dismiss for untimeliness are exceptionally common in business divorce litigation. Statute of limitations analysis can be deceptively simple in theory, but elusively difficult in practice, even for veteran judges. Identifying the applicable statute of limitations is just one of three steps a court must perform as part of its decision making process:
- What’s the applicable statute of limitations?
- What’s the accrual date of the claim?
- Are there any applicable tolls or equitable exceptions?
A recent decision from the Albany-based Appellate Division – Third Department, Lambos v Karabinis (___ AD3d ___, 2025 NY Slip Op 03367 [3d Dept June 5, 2025]), is a reminder to business divorce litigants – on either side of the v. – not to overlook that crucial third step in the statute of limitations analysis, which can rescue complaints from pre-answer dismissal even if they allege misconduct from decades earlier.Continue Reading A Tardy Plaintiff’s Best Friend: The Open Repudiation Doctrine