Commercial Division Blog
Posted: April 19, 2016 / Categories Commercial, Corporations
Unanimous Consent of Partners Needed to Sell All of Partnership's Property
On April 12, 2016, the First Department issued a decision in Cara Associates, L.L.C. v. Milstein, 2016 NY Slip Op. 02728, holding that a partnership needed unanimous approval to sell all of its property, even though it was in the business of selling property.
Cara Associates related to a dispute between the partners of a partnership formed to construct and manage a condominium over control of the partnership and whether the partnership could sell the remainder of its unsold units. With respect to the latter question, the First Department held that all partners needed to approve the sale, explaining:
The purpose of each partnership was to construct and manage a condominium. If all of the partnerships' remaining condominium units are sold, the partnerships will not be able to carry on business. Therefore, Partnership Law § 20(3), rather than § 40(8), applies to the sale of the remaining units. Unanimity of the partners is thus required to sell the remaining units.