Question: Please answer the Questions for Analysis 1 and 2. IN RE 1545 OCEAN AVENUE, LLC Supreme Court, Appellate Division, Second Department New York, 893 N.Y.S.2d

Please answer the Questions for Analysis 1 and 2.

Please answer the Questions for Analysis 1 and 2.

IN RE 1545 OCEAN AVENUE, LLC Supreme Court, Appellate Division, Second Department New York, 893 N.Y.S.2d 590 (2010) LE Case Background 1545 Ocean Avenue LLC was ed for a real estate development. It was owned 50-50 by two companies, Ocean Suffolk and Crown Data which each had a membership certificate in 1545. The operating agreement contained no provi sions relating to dissolution of the LLC Two managers were appointed; Crown Royal appointed King and Ocean Suffolk appointed Van Houten to operate 1545. As work progressed, King and Van Houten argued over the project. King announced that Crown Royal wanted to pull out of 1545 and sued for work to stop and the LLC to be dissolved. The trial court granted those requests. Van Houten and Ocean Suffolk appealed. Thus, the dissolution of a limited liability company under LLCL 702 is initially a contract-based analysis.... Here, a single manager's unilateral action in furtherance of the business of 1545 LLC is specifically contemplated and permitted. Article 4.1 of the 1545 LLC Operating Agreement states: At any time when there is more than one Man- ager, any one manager may take any action per mitted under the Agreement, unless the approval of more than one of the Managers is expressly required pursuant to the Agreement or the Act. This provision does not require that the managers conduct the business of 1545 LLC by majority vote. It empowers each manager to act autonomously and to unilaterally bind the entity in furtherance of the busi- ness of the entity. The 1545 LLC operating agreement, however, is silent as to the issue of manager conflicts. Thus, the only basis for dissolution can be if 1545 LLC cannot effectively operate under the operating agree ment to meet and achieve the purpose for which it was created. In this case, that is the development of the property which purpose, despite the disagreements between the managing members, was being met.... Upon a review of the evidence submitted, we conclude that the Supreme Court did not providently exercise its discretion in granting the petition for dissolution. Thus, Case Decision Austin, Judge LLCL [Limited Liability Company Law] $ 702 pro- vides for judicial dissolution as follows: On application by or for a member, the Supreme Court in the judicial district in which the office of the limited liability company is located may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.... the order of the Supreme Court should be reversed the petition denied, and the proceeding dismissed. LLCL 702 is clear that unlike the judicial dissolu- tion standards in the Business Corporation Law and the Partnership Law, the court must first examine the limited liability company's operating agreement to determine, in light of the circumstances presented, Whether it is or is not reasonably practicable for the limited liability company to continue to carry on its business in conformity with the operating agreement. Questions for Analysis 1. The unhappy member, King (Crown Royal), cannot get out of the LLC this way. What options exist? 2. What should the members have done differently when they set up 1545 LLC

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