Issue

Business dispute—purported transfer of interests—noncompliance with operating agreement

Summary

In a designated complex business case involving a dispute between three investors over the membership and management of their real estate development limited liability company (LLC) (in which two of the investors were identified as the LLC's managers, and the investors' three individually controlled real estate companies as members), the Business Court did not err by granting summary judgment to defendants on plaintiff's declaratory judgment claim. Although plaintiff asserted that the real estate companies had transferred their membership interests before voting to oust him as manager, rendering their vote invalid, any transfer of interest had to be in accordance with the mandatory transfer provisions of the LLC's Operating Agreement. Plaintiff waived his argument regarding two of the three relevant provisions; as to the third, plaintiff's own assertions defeated his claim because he admitted to not completing steps necessary to effectuate the transfers. Thus, the purported transfers were null and void, and the vote to remove plaintiff as manager was valid.

Summary from the North Carolina Reports digest (official subject index). Read the opinion →