Commercial Division Blog
Limitations Period for Corporate Derivative Claims Does Not Apply to LLC Members
On June 2, 2015, Justice Sherwood of the New York County Commercial Division issued a decision in Blumenstyk v. Singer, 2015 NY Slip Op. 30929(U), holding that the limitations period for corporate derivative claims does not apply to derivative claims made by members of an LLC, explaining:
Plaintiffs contend that all of their derivative claims are governed by the six-year limitations period set forth in CPLR 213(7). That subsection applies, in relevant part, to an action by or on behalf of a corporation against a present or former director, officer or stockholder. Plaintiffs cite no case, and this court is aware of none, that holds CPLR 213(7) to be applicable to partnerships or limited liability companies. In CPLR 213(7), the legislature specifically provided an exception for actions brought on behalf of corporations to the shorter limitations periods for certain actions. It is for the legislature, not the courts, to extend the six year period to other claims, such as derivative claims for other types of entities. In fact, CPLR 201 specifically provides that no court shall extend the time limited by law for the commencement of an action.
(Internal quotations and citations omitted) (emphasis added).