Page 2 - Commercial Litigation

S2 | MONDAY, AUGUST 8, 2016 | Commercial Litigation
| NYLJ.COM

Business Divorces

In LLCs Happen,

Business Prenups

Should Too

K
OC
iST

Every LLC has an operating agreement This is where judicial dissolution often is nation of the business relationship between
BY DOMINIC PICCA
explaining the purpose of the LLC, the rights raised as a potential solution. However, judi- the members such as a buyout option or a
AND ELIZABETH WILKINSON
and obligations of its members and various cial dissolution comes with two problems. forced sale to a third party.
Mother provisions regarding the company and First, there are many obstacles and dificult LLCL §702, ‘1545 Ocean Ave’ and ‘Gold-
any business relationships start its operations.1 While operating agreements criteria to meet prior to a court allowing a stein’ (Ramos Decision). LLCL §702 provides
out happily. But what happens if can provide instructions for what to do if the judicial dissolution. Second, judicial dissolu- for judicial dissolution of an LLC “whenever
things change and the parties that relationship between the members sours, they tion requires the appointment of a receiver, it is not reasonably practicable to carry on
each own 50 percent of the Limited Liabil- often lack such provisions because the parties which generally will not maximize the value the business in conformity with the articles
ity Company (LLC) no longer can agree on never contemplate “what if we end up disliking of the company for its members upon dis-

anything concerning its operations. Judicial each other,” leaving the members in a stalemate solution. To avoid those obstacles, LLC
dissolution? There are better ways if the par- position when that unanticipated outcome agreements should anticipate the issue of DOMINIC PICCA is a member at Mintz Levin in New
ties think ahead when drafting operating occurs. They cannot agree and yet are unable “deadlock” and should include provisions in York, where he heads that oice’s litigation practice.
agreements.
to part ways without a road map to do so.
the operating agreement related to the termi-
ELIZABETH WILKINSON is an associate at the irm.

Inside
Commercial Litigation

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BY STEWART D. AARON,
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AND MITRA P. SINGH
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AND NICOLE PASCHAL
S

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