Operating Agreement

Subscribe to Operating Agreement via RSS

It’s one thing to claim that someone never became a member of an LLC, it’s another to claim that an admitted LLC member later withdrew. Justice Stephen Bucaria addresses the latter claim in his recent decision in Gitlin v. Chirinkin, featured in this week’s New York Business Divorce.
…
Continue Reading Member of Real Estate LLC Never Withdrew, Held Entitled to Share of Sale Proceeds

In Georgi v. Polanski, decided last month by Kings County Commercial Division Justice David Schmidt, the court addresses the right of a controlling LLC member to expel the non-controlling member upon his failure to comply with a capital call. It’s in this week’s New York Business Divorce.
…
Continue Reading Not a Capital Idea: Making Unauthorized LLC Capital Calls

The hydra-headed Ficus Investments litigation is the gift that keeps on giving, at least to students of business divorce. This week’s New York Business Divorce highlights the latest appellate decision in the case, in which the court reversed an order dissolving the limited liability company that managed the mortgage business at the center of the melee.
…
Continue Reading Dispute Over Authenticity of Operating Agreement Leads to Reversal of Order Summarily Granting LLC Dissolution

It’s hard to imagine a more challenging fact pattern and set of legal issues for a law school exam than the one presented in real life in the recently decided case, Pappas v. Tzolis, involving a buyout among LLC members followed by the purchasing member’s sale of the LLC’s asset to an outside buyer for a price far in excess of the buyout, followed by a lawsuit by the former members claiming they were bamboozled by the buying member. Read all about it in this week’s New York Business Divorce.
…
Continue Reading Does Operating Agreement’s Clause Permitting Competitive Activities Eliminate Member’s Fiduciary Duty to Disclose Negotiations to Sell LLC’s Assets Before Buying Out Co-Members?

Can a court order the expulsion of an LLC member for misconduct absent language in the operating agreement so providing? Get the answer in this week’s New York Business Divorce highlighting a recent decision by the Appellate Division, Second Department, posing the issue in the context of a bitter dispute between two brothers.
…
Continue Reading Tzolis No Solace for Proponent of LLC Member Expulsion

The expulsion of an LLC member for breach of the LLC agreement, when combined with buyout provisions that leave the expelled member with little or no return on investment, is a sure-fire recipe for litigation, as evidenced in a recent decision by Manhattan Commercial Division Justice Melvin Schweitzer in Jain v. Rasteh. Read about it in this week’s New York Business Divorce.
…
Continue Reading The Perils of For-Cause Expulsion Provisions in LLC Agreements

On January 26th, in a case called Matter of 1545 Ocean Avenue, LLC, the Appellate Division, Second Department, became the first New York appellate court since the LLC Law’s enactment in 1994 to articulate a standard for judicial dissolution of limited liability companies. Read about Justice Leonard Austin’s scholarly opinion for the court, from which two justices dissented in part, in this week’s New York Business Divorce.
…
Continue Reading It Only Took 16 Years: New York Appellate Court Defines Standard for Judicial Dissolution of Limited Liability Companies

This week’s New York Business Divorce presents Part II of my interview with the co-authors of “Drafting Delaware LLC Agreements”, in which prominent Delaware lawyer and LLC expert Vernon Proctor answers questions about Delaware LLCs from the litigator’s perspective. Don’t miss it!
…
Continue Reading Interview with Delaware LLC Experts and Practice Manual Co-Authors John Cunningham and Vernon Proctor: Part II