Always Check Provenance
Before Taking an Assignment of LLC Interest
Peter Mahler, in his blog New
York Business Divorce, on March 2 posted an interesting article under the
title Always Check Provenance Before
Taking an Assignment of LLC Interest; HERE IS A LINK to that posting.
Therein, he reviewed the
decision rendered in Behrend v. New
Windsor Group, LLC,180 A.D.3d 636, 118
N.Y.S.3d 709 (N.Y. App. Div. 2020). Essentially,
an assignee claimed that they owned a 50% interest in an LLC that owned a
shopping center. It turned out, however, that the alleged assignor did not own
a 50% membership interest, but rather held a contingent interest, the terms of
which were never satisfied. As such, the purported assignor did not own the membership
interest, and as such could not transfer it.
Peter’s advice, which I would second, is that anyone seeking to take an
assignment of an LLC interest needs to adopt an attitude of “buyer beware” and
undertake the often significant due diligence that is necessary to confirm they
are buying what they really think they are buying.
This is an excellent write-up! Keeping up with assignments and ensuring everything is properly polished can be incredibly time-consuming for students, so resources like this are always a massive help. For anyone finalizing their essays or research papers right now, it is always a good idea to run a quick final check before submitting. You can use a Free Plagiarism Checker Online to ensure your work is completely original and ready for grading.
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