On January 19, 2024, Law360 published an article authored by LSSC's Peter ("Tad") LeVan, Jr. and Lowry Yankwich analyzing rights of dissociated members of New Jersey LLCs.
As their article, "NJ Ruling May Widen Plaintiff Opportunities In LLC Disputes," explains, in resolving LLC disputes under the prior statutory scheme, courts in New Jersey historically required the payment of fair value for an LLC member’s ownership interests following voluntary resignation or dissociation. The current LLC Act, however, contains no express requirement for such relief and, instead, provides courts with equitable discretion to determine whether a dissociated member is entitled to compensation based upon the circumstances of the case.
A recent decision of the Appellate Division of the New Jersey Superior Court—Flor v. Greenberg Farrow Architectural Inc., No. A-2208-20, 2023 WL 7036278 (N.J. Super. Ct. App. Div. Oct. 26, 2023)—supports the view that wrongful conduct is not limited to being a basis for dissociation as it may also result in the dissociated member losing rights to compensation for their company shares.
LeVan and Yankwich discuss the Flor decision in detail and its possible application to future disputes between LLC members, both in New Jersey and elsewhere.
You may read the article here.
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