Case ID: ad3d_114/html/0570-01.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

(February 25, 2014)
    In the Matter of Empire State Realty Trust, Inc. Investor Litigation. Leon Meyers et al., Respondents, and Mary Jane Fales et al., Intervenor Plaintiffs-Appellants, v Malkin Holdings L.L.C. et al., Respondents.
    [981 NYS2d 58]
   Order, Supreme Court, New York County (O. Peter Sherwood, J.), entered April 30, 2013, which denied appellants’ application for a judicial declaration that a contractual buyout provision violates the Limited Liability Company Law, unanimously affirmed, without costs.

In this action relating to participation agreements entered into by the partners of Empire State Building Associates (ESBA) pursuant to which they each syndicated their beneficial interests in ESBA into 1,100 “Participation Interests,” which were sold to more than 3,000 passive investors, appellants, who are ESBA participants with a fractional ownership interest in an ESBA membership interest, maintain that the buyout provisions contained in the participation agreements are invalid and unenforceable under Limited Liability Company Law § 1002 because they deprive dissenting investors of their statutorily guaranteed right to the “fair value” of their interests. The motion court properly denied appellants’ application for a declaration that the buyout provisions violate the Limited Liability Company Law since appellants are not “members” in the limited liability company who are entitled to the fair value appraisal protections set forth in section 1002 (f).

We have considered the parties’ additional arguments and find them unavailing. Concur — Gonzalez, EJ., Andrias, Saxe, Richter and Clark, JJ.