Transfer restrictions in LLC operating agreements often sit quietly in the background—until a member tries to sell, assign, or gift their interest. Then, as the New York Supreme Court illustrated in Verderber v. Commander Enterprises Centereach, LLC , they can become decisive. In this case, the Verderbers held a 20% membership interest in a real estate–holding LLC. When they eventually transferred their interest to their family entity, Verbenco LLC, a dispute erupted over (1

If you’ve ever tried to transfer your ownership in a New York LLC, you may have discovered that it’s not as simple as handing over stock certificates or signing a quick assignment. New York treats LLC membership differently, and if you don’t follow the rules, you can end up with disputes, delays, or even a transfer that doesn’t legally stick. In this article, we walk through the basics using guidance from New York’s Limited Liability Company Law and a real-world case, Gartner

In the operation of a New York limited liability company (“LLC”), written operating agreements and formal corporate procedures are undoubtedly best practices. Nevertheless, New York courts at times recognize that the absence of formal documentation does not render the conduct of LLC members legally insignificant. Indeed, long‑standing practices, oral understandings, and informal arrangements may be enforceable, provided they reflect mutual assent and do not conflict with the

For many New York LLCs, relationships change long before paperwork does. A member may stop participating in operations, stop contributing capital, or declare themselves “withdrawn” from the business. But as Sealy v. Clifton LLC  illustrates, failing to formally transfer or assign a membership interest —or to seek judicial dissolution —can create years of uncertainty, litigation, and financial exposure. 1. You’re Still a Member Until the Law Says You’re Not In Sealy , the adm

Escrow accounts are designed to protect buyers and sellers by holding funds neutrally until contractual conditions are met. But what happens when the escrow agent steals money—the very person entrusted to safeguard the money? Unfortunately, New York courts have addressed this scenario more than once, and the answer often surprises clients: someone still bears the loss, even though neither party committed the wrongdoing. A recent Brooklyn real estate dispute, Herman v. 818 Woo