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Posted: December 2, 2016

Amended Operating Agreement Not Documentary Evidence Proving Plaintiff Was Not an LLC Member

On November 22, 2016, Justice Knipel of the Kings County Commercial Division issued a decision in Cupcake & Boomboom, LLC v. Aslani, 2016 NY Slip Op. 32310(U), holding that an amended LLC operating agreement that did not list the plaintiff as a member was not satisfactory documentary evidence that the plaintiff was not a member, explaining:

[T]he documentary evidence relied upon by Aslani does not show that Vigouroux ever relinquished or transferred his membership interest in CCBB, The Registration Certificates were never signed and were, therefore, patently insufficient to show a transfer of Vigouroux’s interest in CCBB. Moreover, subsequent to the January 2, 2013 date of these Registration Certificates, Aslani executed the 2014 Operating Agreement, in which he certified, by his signature, that the 2014 Operating Agreement was adopted and approved by each member. As discussed above, the 2014 Operating Agreement set forth that Vigouroux’s interest in CCBB was 39%. There is no evidence of any subsequent written consent by a majority of the members of CCBB to a transfer of Vigouroux’s interest in CCBB. There is also no showing that any consideration was ever paid to Vigouroux for any transfer of his interest in CCBB since the Promissory Note relied upon by Aslani was not signed by CCBB and, as such, was unenforceable. While Aslani relies upon the 2015 Operating Agreement as documentary evidence, such reliance is misplaced since changes to an operating agreement that adversely affect a member’s right to distributions require the consent of that member in writing. Here, Vigouroux did not sign the 2015 Operating Agreement, and did not provide his consent to this agreement, which purported to eliminate his membership interest in CCBB. Thus, since the 2015 Operating Agreement contravenes statutory requirements, it is ineffective to deprive Vigouroux of his membership interest in CCBB.

(Internal quotations and citations omitted) (emphasis added).

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