More on Non-Unanimous Approval of Operating Agreements

More on Non-Unanimous Approval of Operating Agreements

      Some states, including Kentucky and New York, is a default rule provides that an LLCs operating agreement may be amended by a simple majority of the members. This is in contrast to the rule in most states, which require, again as a default rule, and unanimous approval to amend an agreement. Last year, writing with Katharine Sagan, I published an article discussing an amendment by less than all of the members. Thomas E. Rutledge and Katharine M. Sagan, An Amendment Too Far?: Limits on the Ability of Less Than All Members to Amend the Operating Agreement, 16 Florida State University Business Review 1 (Spring 2017). HERE IS A LINK to that piece.

      In that article, one of the cases discussed was Schapiro, a decision from New York that has been reviewed by Peter Mahler in his blog New York Business Divorce. HERE IS A LINK to Peter’s review of the initial Schapiro decision.

      In a new posting, Peter reports on both the subsequent actions in the Schapiro case and other disputes that have arisen based upon the ability of less than all of the members to adopt an operating agreement. HERE IS A LINK to Peter’s review of those newer decisions.