Operating Agreement

Subscribe to Operating Agreement via RSS

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

Hop Farmers

The Appellate Division, Second Department delivered last week a fascinating case pitting a deadlock-based LLC dissolution petition against an equity forfeiture provision in the parties’ operating agreement.  Add to that a bracing reminder that lazy pleadings and procedural missteps in special proceedings can be outcome-determinative, and Ribeiro v Libutti, 2025 NY Slip Op 06865 (2d Dept Dec. 10, 2025), becomes a cautionary tale for business owners and litigators alike.…

Continue Reading Hop Farmers Face Membership Forfeiture as a Deadlock Breaker and a Bitter Lesson on Pleading Shortcuts

Bic logo

This week’s New York Business Divorce features an intra-family battle concerning the precise contours of admittance as a “full” member of the family business.…

Continue Reading For Embattled Bich Family, “Full Membership” Requires Admittance Without Precondition

LLCL 417

Section 417 of New York’s LLC Law permits the members to eliminate their fiduciary duties, but only in very narrow circumstances.  This week’s post shows how the seemingly toothless provision can carry the day. …

Continue Reading The Humble LLC Exculpation Clause Wins Big: Member/CEO Escapes $8M Fiduciary Claims

Spring in New York has ushered in a fresh crop of noteworthy decisions on intra-LLC disputes.  Headliners include a boost to members’ rights to compel an accounting courtesy of the First Department, a procedural refresher on LLC dissolution and the applicable standard, and a winding dispute over membership bequests in the Surrogate’s Court.…

Continue Reading Demand Futility, Dissolution, and Transfer Restrictions: Spring Blooms Fresh Developments in LLC Litigation

Older,Accountant,With,A,Calculator,Valuing,A,Business,With,Paperwork

Business appraiser liability? A minority owner of an LLC recently took a run at it, alleging that a valuation firm conspired with the majority owners to undervalue his interest for a compelled buyout under the operating agreement. Learn how the court handled this novel issue in this week’s New York Business Divorce.…

Continue Reading Business Appraiser Liability? That’s a New One.

301a

The subject of this week’s post has it all: cinematic threats, emergency court orders, changed locks, an intentional foreclosure, a tactical bankruptcy filing, and a trip to the Second Circuit Court of Appeals.  The resulting opinion is equally satisfying.
Continue Reading LLC Member States Direct Claims Arising from Machiavellian Manager’s Tactical Bankruptcy Petition

snowglobe.jpg

This week’s New York Business Divorce presents the 2025 Winter Case Notes, where we highlight a few recent decisions of interest featuring strict adherence to statutory language and the parties’ governing agreements.
Continue Reading Winter Case Notes: Nice Try, But the Agreements Say What They Say

Picture,Of,Man,In,Business,Suit,Wearing,A,Blindfold,As

This week’s New York Business Divorce features the highly anticipated ruling by the New York Court of Appeals, in a 4-3 decision in Behler v Tao, affirming dismissal of a complaint seeking to enforce an oral “exit opportunity agreement” involving a Delaware LLC. …
Continue Reading New York Top Court’s Advice to Prospective Investors in Delaware LLCs: Pay Close Attention to Controller’s Power to Amend LLC Agreement

Create,Image,Of,Train,Like,The,Little,Engine,That,Could

The irony of litigation over buy-sell agreements is that such agreements are specifically intended to avoid litigation when owners die or become disabled or otherwise seek to exit the firm. Take, for example, last week’s Appellate Division ruling, reversing the lower court’s decision dismissing a claim to enforce an operating agreement’s buy-sell provision. Better yet, read about it in this week’s New York Business Divorce.
Continue Reading The Little Buy-Sell That Could