To help valuation professionals understand how the judicial system resolves such LLC disputes, Fred D. Weinstein, Esq (http://www.kelaw.com/
The Courts’ Remedy: ‘Equitable Buyout’
Mr. Weinstein will review several landmark court cases that have helped to establish the concept of “equitable buyout” to protect the interest of minority LLC members. These cases include Mizrahi v. Cohen, 104 A.D.3d 917 (2013 NY Slip Op 02056), in which the plaintiff had carried the financial burden of a commercial property for years, and Superior Vending LLC, 71 A.D.3d 1153 (2nd Dept.2010), which required the majority member to purchase the interest of the minority member prior to the dissolution of the LLC.
“The judicial system has done an admirable job of filling the statutory void left by the LLC Law,” Mr. Weinstein says. “We expect the number of these cases will proliferate, and LLC member interest valuations will become a common part of a valuation professional’
LLCs Need Well-Drafted Operating Agreements
As for business people who are part of an LLC, Mr. Weinstein emphasizes the importance of preparing a well-drafted operating agreement that provides for the rights of members who exit the LLC. Noting that New York State requires LLCs to have operating agreements, Mr. Weinstein points out that many LLCs use generic agreements that fail to cover all necessary contingencies. "A well-constructed operating agreement should include terms for the dissolution of LLC and how to resolve member conflicts," he says. “Seek the necessary legal help to develop a customized operating agreement suited to your circumstances. It will greatly reduce the risk of litigation down the road.”
About Fred D. Weinstein, Esq.
Fred Weinstein is a versatile and successful commercial litigator and chair of the Litigation Department at Kurzman Eisenberg Corbin & Lever, LLP. He is an expert in all phases of litigation, from initial investigation and discovery, to trial and appeal, and represents corporations as well as individuals in federal and state courts, and in arbitration proceedings. He has successfully represented clients in court cases involving valuation of minority interests and lost profits. Reported cases include Superior Vending Services Inc. v. Workmen’s Circle Home and Infirmary Foundation For The Aged, et al., Supreme Court, Westchester County (2013), and Matter of Jamaica Acquisition, Inc. v. Shea, Supreme Court, Nassau County (2009).
Mr. Weinstein is a resident and a former Justice for the Town of Briarcliff Manor, NY.
About Kurzman Eisenberg Corbin & Lever, LLP
Kurzman Eisenberg Corbin & Lever, LLP was founded in 1985 to provide superior, sophisticated and cost-effective legal services to a broad range of individuals and corporate clients. The firm was designated in 2012 as one of the New York Area’s Top Ranked Law Firms® based on the number of attorneys at the firm with AV Preeminent ratings. The firm provides a full range of legal services in various practice areas, including corporate, litigation, real estate, tax and trusts and estates, and the firm’s size and expertise in a variety of disciplines allows its lawyers to handle complex legal matters. The attorneys at Kurzman Eisenberg Corbin & Lever, LLP have impressive backgrounds and an extraordinary commitment to client service. For more information, the public is invited to visit www.kelaw.com.