You are here: / / THE STRUCTURED ACQUISITION OF A LIMITED LIABILITY COMPANY DID NOT CONSTITUTE...
, ,

THE STRUCTURED ACQUISITION OF A LIMITED LIABILITY COMPANY DID NOT CONSTITUTE A DISSOLUTION OF THE COMPANY UNDER THE TERMS OF THE OPERATING AGREEMENT (SECOND DEPT).

The First Department, in a full-fledged opinion by Justice Friedman, reversing (modifying) Supreme Court, determined the operating agreement was not breached. The facts and issues are too complex to fairly summarize here:

The primary question on this appeal is whether an acquisition of a limited liability company, which transaction was structured as a sale of 100 percent of the membership interests in the target company, may be characterized as a dissolution of the company under the terms of its operating agreement. A former preferred shareholder of the target company, seeking to recover the preferred return to which it would be entitled upon a dissolution, argues that the sale of the company’s equity should qualify as a dissolution under the operating agreement because the transaction necessarily involved the transfer of control of all of the company’s assets and the operating agreement provides that dissolution must occur “upon the disposition by the Company of substantially all of its assets.” We are not persuaded by this argument, and therefore modify the order under review to grant defendants summary judgment dismissing the former preferred shareholder’s cause of action for breach of contract. Southern Advanced Materials, LLC v Abrams, 2023 NY Slip Op 04704, First Dept 9-20-23

Practice Point: This factually complex opinion in a breach-of-contract action grapples with what constitutes a dissolution of a company under the terms of the operating agreement.

 

You might also like
Admission Into Evidence of Nontestifying Codefendant’s Grand Jury Testimony Violated Defendant’s Sixth Amendment Right of Confrontation
LEASE WAS NOT AN ATTEMPT TO THWART (NYC) RENT CONTROL AND WAS THEREFORE VALID AND ENFORCEABLE.
DEFENDANT DETOXIFICATION FACILITY NOT ENTITLED TO SUMMARY JUDGMENT IN ACTION BASED UPON THE DEATH OF A MAN WHO WAS TREATED, LEFT AND WAS FOUND DEAD A MONTH LATER, DEFENDANTS POINTED TO GAPS IN PLAINTIFF’S PROOF OF CAUSATION BUT DID NOT AFFIRMATIVELY DEMONSTRATE THE ABSENCE OF CAUSATION (FIRST DEPT).
WITH THE EXCEPTION OF THE FRAUD CAUSE OF ACTION, THE NONRECOURSE CLAUSE PRECLUDED THIS LAWSUIT AGAINST THE PRINCIPALS OF DEFENDANT CORPORATION; PLAINTIFF HAD WON AN ARBITRATION AWARD AGAINST DEFENDANT FOR OVER $200 MILLION AND BROUGHT THIS ACTION AFTER DEFENDANT FILED FOR BANKRUPTCY (FIRST DEPT). ​
DEFENSE COUNSEL MOVED TO SUPPRESS AN UNNOTICED EYEWITNESS IDENTIFICATION OF THE DEFENDANT AFTER BEING TOLD THE IDENTIFICATION WOULD BE PRECLUDED IF HE DID NOT MOVE TO SUPPRESS; DEFENSE COUNSEL INTRODUCED DEFENDANT’S MUG SHOT DESPITE THE SUPPRESSION OF THE PHOTO ID; DEFENSE COUNSEL DID NOT OBJECT TO A DETECTIVE’S IMPROPER IDENTIFICATION OF THE DEFENDANT IN A BLURRY VIDEO; THE MOTION TO VACATE DEFENDANT’S CONVICTION ON INEFFECTIVE ASSSISTANCE GROUNDS SHOULD HAVE BEEN GRANTED (FIRST DEPT).
COMBINED RACIAL-GENDER BIAS IS A PROPER SUBJECT OF A BATSON CHALLENGE TO THE REMOVAL OF A JUROR; APPELLATE DIVISION HAS INTEREST OF JUSTICE JURISDICTION TO REVIEW BATSON ERRORS.
ALTHOUGH INDIVIDUAL DEFENDANTS, OFFICERS OR EMPLOYEES OF DEFENDANT CORPORATION, DID NOT SIGN THE AGREEMENT IN THEIR INDIVIDUAL CAPACITIES, THEY ARE ENTITLED TO ENFORCE THE ARBITRATION PROVISION OF THE AGREEMENT (FIRST DEPT).
THE SEARCH OF A CAR AFTER DEFENDANT HAS BEEN REMOVED FROM THE CAR CANNOT BE CONSIDERED A SEARCH INCIDENT TO ARREST; SUPPRESSION GRANTED AND INDICTMENT DISMISSED (FIRST DEPT).

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2025 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy

DEFENDANT-PETITIONER WAS ENTITLED TO RELEASE FROM PRE-INDICTMENT CUSTODY PURSUANT... DEFENDANT IS ENTITLED TO CONSIDERATION WHETHER HE SHOULD BE AFFORDED YOUTHFUL...