Good Faith Trumps Sole Discretion in LLC Agreement’s Repurchase Provision

Good Faith Trumps Sole Discretion in LLC Agreement’s Repurchase Provision

 

       Peter Mahler, in his blog New York Business Divorce, has reviewed a case involving an LLC buy-out provision that mixed the sole discretion and good faith standards,. The  short-term result was that summary judgment could not be granted the company on its argument that the plaintiff could not challenge the company’s valuation of the plaintiff’s interest therein.   Long-term it may mean that the valuation will not stand up, and the company may be subject to damages in excess of the value of the interest.

      HERE IS A LINK to Peter’s  review of Saleeby v Remco Maintenance, LLC, 2016 NY Slip Op 31447(U) [Sup Ct NY County July 25, 2016].