WRITTEN LLC OPERATING AGREEMENT VS. SUBSEQUENT ORAL AGREEMENT

March 16, 2021

Under the link below is a new post by Peter Mahler relevant to all too many LLC clients.  Peter summarizes the issue in the post as follows:

The interaction between an LLC’s operating agreement and a subsequent, informal deal between the members raises difficult questions surrounding the enforceability of either agreement. In a recently-filed Manhattan Commercial Division case, the Court granted the plaintiff a preliminary injunction, signaling to the parties that the plaintiff was likely to succeed on his claim to enforce the informal deal notwithstanding arguably contrary provisions in the operating agreement. The case reminds us that the formality requirements of an LLC operating agreement may give way to an informal agreement when both LLC members manifest their intent to be bound by the informal agreement

Here is the link:

https://www.nybusinessdivorce.com/2021/02/articles/buyout/a-shotgun-buy-sell-agreement-and-an-email-deal-walk-into-a-beachside-bar/

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