Wednesday, July 29, 2020
Disputes Over Member Status Continue to Roil the LLC Waters
Disputes Over Member Status Continue to Royal the LLC Waters
Peter Mahler, in his blog New York Business Divorce, on July 13 posted Disputes Over Member Status Continue to Royal the LLC Waters. HERE IS A LINK to that posting. I would highly recommend it to you.
Therein, Peter reviews a trio of recent decisions from New York, all involving the question of who is (or is not) a member of the LLC, particularly as contrasted with the person who owns only an economic right in the venture. Each of these decisions carries an important lesson, namely how crucial it is that contemporaneous documentation of changes in membership and economic ownership of an LLC must be maintained. Absent contemporaneous records, there will invariably be disputes requiring the intervention of a court or an arbitrator, often in years after the events in question with the resultant feeding of memories and losses of documentation.