Standing

Mere Assignment of an LLC Membership Interest Does Not Make You a Member

By Franklin C. McRoberts on December 21, 2025

Posted in LLCs, Operating Agreement, Standing

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.…

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Score Another Round for the Estate: First Department Upholds Right of Deceased LLC Member’s Executor to Pursue Member Rights

By Peter A. Mahler on November 10, 2025

Posted in LLCs, Standing

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A recent appellate ruling provides the perfect excuse for revisiting a favorite topic, namely the powers of an estate representative of a deceased LLC member.
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A Wolf in Sheep’s Clothing: Shareholder Agreement’s “Except as Otherwise Set Forth Herein” Hands Control of Famed Restaurant to Minority Shareholders

By Peter A. Mahler on September 2, 2025

Posted in Corporate Governance, Standing

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“Except as otherwise set forth herein” is a common proviso in agreements of all sorts. It can provide clarity. It also can cause dispute, as in the case highlighted in this post.…

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Check Your Footing: $36 Million Money Judgment Eviscerated in Brutal Appellate Standing Loss

By Franklin C. McRoberts on December 30, 2024

Posted in Delaware, Operating Agreement, Standing

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Imagine litigating a case for nearly eight years to an eight figure money judgment, only to lose on appeal for lack of standing. It happened in our final New York Business Divorce story of 2024. …
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To be or Not to Be (a Member). That is the Question… That Estoppel Can Help Answer.

By Becky (Hyun Jeong) Baek on December 16, 2024

Posted in Access to Books and Records, Capital Call, LLCs, Standing

This week’s New York Business Divorce post concerns the impact that estoppel can play in determining the all-important question of, “Am I a member of the LLC?”…
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Summer Shorts: An Unusual Application of LLC Law § 608 and Other Decisions of Interest

By Peter A. Mahler on August 12, 2024

Posted in Bankruptcy, Family-Owned Businesses, LLCs, Operating Agreement, Professional Service LLCs, Standing, Summer Shorts

This week’s New York Business Divorce proudly presents the 14th annual edition of Summer Shorts featuring brief commentary on three recent decisions of interest in business divorce cases in the New York courts.
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Crossing the Hudson: Recent Business Divorce Decisions from Yonder States

By Peter A. Mahler on April 8, 2024

Posted in Corporate Governance, Delaware, Dissenting Shareholder Appraisal, Dissolution Basics, Expulsion and Removal, Family-Owned Businesses, Grounds for Dissolution, LLCs, Operating Agreement, Partnerships, Standing, Valuation

On the menu for this week’s New York Business Divorce: five noteworthy business divorce cases from five different states. …
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Ambiguous Agreement, Clear Consequences

By Peter J. Sluka on January 2, 2024

Posted in Derivative Actions, Liquidation, LLCs, Standing

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More than any other entity, Limited Liability Companies are most prone to informal, ambiguous deals among their owners, which become a font for litigation down the road. 2024 begins with a federal trial over an ambiguous, oral agreement. …
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Surrogate’s Court Jurisdiction to Resolve Close Business Owner Disputes

By Franklin C. McRoberts on August 28, 2023

Posted in Derivative Actions, LLCs, Standing

In this week’s New York Business Divorce learn whether, and if so, under what circumstances, the New York Surrogate’s Court can compel an accounting of a non-party business entity in which a decedent’s estate holds a minority stake.
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Can a Shareholder Suing Derivatively Face Countersuit Individually?

By Franklin C. McRoberts on August 7, 2023

Posted in Derivative Actions, Standing

New York law regards a shareholder derivative plaintiff’s standing as fundamentally distinct from the plaintiff’s individual capacity. That leads to problems where a shareholder derivative defendant hopes to counterclaim against the plaintiff for personal liabilities. Read about this problem, and whether it forecloses direct counterclaims against shareholder derivative plaintiffs, in this week’s New York Business Divorce.
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