Debbie Pappas as personal representative of the Estate of Louis Pappas v 38-40 LLC

Rosenberg & Estis, P.C., representing 38-40 LLC, reached a favorable decision on an appeal that member Bradley S. Silverbush opposed in April 2019. The decision unanimously affirmed the favorable decision R&E received from Justice Scarpulla, who had granted R&E’s respective motions for summary judgment dismissing the complaint. This case involved defense of an LLC from an Estate’s derivative and individual claims seeking an accounting as well as the appointment of a receiver and asserting causes of action for alleged misappropriation, breach of fiduciary duty and mismanagement. Silverbush argued that under the terms of the LLC’s operating agreement, death was a “terminating event” and that the decedent’s estate was entitled only to allocations and distributions. The court agreed that since the Estate was not a member, plaintiff lacked standing to pursue derivative claims. In addition, the court reaffirmed the proposition that in New York, a plaintiff’s mingling of derivative and individual claims requires dismissal of the causes of action so affected.