Pryor Cashman Successfully Orchestrates Freeze-Out Merger Victory for New York LLC
In an important decision for limited liability companies, Pryor Cashman successfully won a significant dismissal for a New York LLC client who was faced with a difficult voting equity member. The LLC majority wanted to terminate and throw the member out of the LLC, but dissolution is not an option under such circumstances.
Pryor Cashman accomplished a freeze-out merger by which the then-existing LLC was merged into a new LLC and reconstituted without the difficult minority member. Although NY LLC section 1002 (c) expressly required on its face an in person meeting to vote on the merger, Pryor Cashman, having obtained written consents of the necessary majority required under section 407 (a) of the statute, was able to achieve the freeze out merger without any LLC member meeting and without any advance notice.
The minority member thereafter sued, claiming the merger was void for violation of section 1002(c) and sought damages. The court rejected the argument and dismissed the claims.
Partners Perry M. Amsellem, Richard Frazer, Counsel Benjamin Semel and Associate Erik Kindsch represented the client throughout the process.
