Court Declares Petitioner Remains Managing Member Of LLC Because Operating Agreement Did Not Provide For Removal By Majority Vote

Posted: August 5, 2026 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Categories Contract Interpretation, Commercial

Court Declares Petitioner Remains Managing Member Of LLC Because Operating Agreement Did Not Provide For Removal By Majority Vote

On January 11, 2022, in McCormack v. Kuras, Index No. 656434/2021, Justice Joel M. Cohen granted in part a petition for declaratory relief, declaring that petitioner is and remains the managing member of respondent Triboss Brooklyn, LLC. Respondents had attempted to remove petitioner as managing member by majority vote and to amend the company's articles of organization without petitioner's consent. The Court held that, under the unambiguous terms of the operating agreement, petitioner was appointed managing member and the agreement provided no basis for his removal by majority vote; the only provision addressing a change in the managing member applied where the managing members' aggregate ownership fell below 20 percent, a threshold petitioner had continuously exceeded. The Court also denied respondents' motion to dismiss the petition, denied petitioner's request for preliminary injunctive relief, and denied as premature the branch of the petition seeking judicial dissolution. In rejecting respondents' arguments, the Court explained:

As the Court observed in a related action, TriBoss Brooklyn, LLC v. Kuras, et al. (Index No. 654282/2021, Doc. Nos. 38, 40), the gap-filling provisions of the LLC law do not create a manager-removal right that the parties chose not to include in the Operating Agreement (Goldstein v Pikus, 2015 NY Slip Op 31483[U] [Sup Ct, NY County 2015]; Friedman v Ridge Capital Corp., 2010 WL 5799429 [Sup Ct, NY County 2010]).

The attempt by Respondents Kuras and Ghorayeb to evade the terms of the Operating Agreement by seeking to amend the Articles of Organization – without Petitioner's consent and in violation of the Operating Agreement to which all parties agreed – is similarly unavailing. As stated in Nathanson v Nathanson, 20 AD3d 403, 403–04 [2d Dept 2005], even if the articles of organization vest management of the company in its members generally, "such vesting of authority is 'subject to any provisions in . . . the operating agreement . . . granting or withholding the management powers or responsibilities of one or more members'" (quoting LLCL § 401[a]).

The attorneys at Schlam Stone & Dolan LLP have extensive experience litigating business divorce matters and disputes among the owners of closely-held companies, including disputes over the interpretation and enforcement of LLC operating agreements. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.