Tzolis v. Wolff

10 N.Y.3d 100, 855 N.Y.S.2d 6, 884 N.E.2d 1005 (2008)

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Nature of the Case

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Facts

Pennington Property Co. LLC was the owner of a Manhattan apartment building. Tzolis (P) own 25% of the membership interests in the LLC, brought an action 'individually and in the right and on behalf of' the company. P claims that those in control of the LLC, and others acting in concert with them, arranged first to lease and then to sell the LLC's principal asset for sums below market value; that the lease was unlawfully assigned; and that company fiduciaries benefitted personally from the sale. The suit was dismissed because New York law does not permit members to bring derivative actions on behalf of a limited liability company. The Appellate Division reversed, and this appeal resulted. Ds appealed on a certified question.