Garcia v GarciaAnnotate this Case
Decided on December 6, 2011
Supreme Court, Kings County
Joaquin Garcia, Michael Garcia, Individually and on behalf of JMP Properties, LLC and All-Boro Management Co. LLC, Plaintiffs,
Peter Garcia, Defendants. Peter Garcia, Plaintiff, Joaquin Garcia, Michael Garcia, JMP Properties, LLC and All-Boro Mnagement Co. LLC, Brooklyn Properties 21 LLC and Garcon, Inc., Defendants.
Plaintiff Attorney: Eaton & Van Winkle, 3 Park Avenue, New York, NY 10016
Defendant's Attorney: Troutman Sanders LLP, 405 Lexington Avenue, New York, NY 10174
David Schmidt, J.
The following papers numbered 1 to 11 read herein:
Notice of Motion/Order to Show Cause/
Petition/Cross Motion and [*2]
Affidavits (Affirmations) Annexed1-2, 4-6, 7
Opposing Affidavits (Affirmations)3,8-9
Reply Affidavits (Affirmations)10
Upon the foregoing papers, Joaquin Garcia and Michael Garcia, JMP Properties, LLC (JMP) and All-Boro Management Co. LLC (All-Boro) (collectively referred to as Corporate Entities), who are plaintiffs in action no. 1, and defendants in action no. 2, move, by way of an order to show cause, for an order granting them leave to cease paying Peter Garcia, who is defendant in action no. 1, and plaintiff in action no. 2, any further salary or remuneration, without prejudice to any claims by Peter Garcia for retroactive payment upon resolution of this action. Peter Garcia, by way of an order to show cause, moves for an order, pursuant to CPLR 6301, granting him a preliminary injunction enjoining Michael Garcia and Joaquin Garcia from taking any actions to expel Peter Garcia from JMP and All-Boro for the pendency of this action.
Peter Garcia's motion is denied. The Corporate Entities' motion is granted, and this court's January 26, 2011 order directing the Corporate Entities to, among other things, resume making payments to Peter Garcia is vacated and the Corporate Entities' obligation to make any payments pursuant to that order is deemed to have ended as of the date of this order. The Corporate Entities' motion is granted, however, without prejudice to any claims
by Peter Garcia for retroactive payment upon the resolution of this action, and without prejudice to Peter Garcia's rights under section 11.2 of the operating agreements for All-Boro and JMP.
The two actions before the court arise out of disputes relating to the operation and control of JMP, All-Boro, Brooklyn Properties 21 (Brooklyn Properties) and Garcon, Inc. (Garcon), all of which are limited liability companies formed primarily for the purpose of owning and/or operating various real properties located in Brooklyn. The current motions primarily relate to the operation and control of All-Boro, formed in 1996 and JMP, formed in 1998. Under the original operating agreements for All-Boro and JMP, Peter Garcia, Michael Garcia and Joaquin Garcia were the only members, they each had a 33 1/3 percent membership interest in JMP and All-Boro and each were to required to receive 33 1/3 percent of the profits of JMP and All-Boro (All-Boro and JMP Operating Agreements, Schedule A). Peter and Joaquin Garcia are brothers, and Michael Garcia is Joaquin Garcia's son and Peter Garcia's nephew.
In their complaint in action no. 1, the Corporate Entities contend that Peter Garcia has exercised complete dominion and control over the books and records of All-Boro and JMP, that he was the member responsible for paying the distributions and allocations of profits to the other members, and that, despite the operating agreement requirement that each member [*3]receive an 1/3 share of the distributions from JMP and All-Boro, Peter Garcia diverted to himself over $1,250,000 in distributions above his 1/3 share. Based on these allegations, the Corporate Entities have alleged causes of action premised on breach of contract, money had and received, conversion, breach of fiduciary duty, and fraud. While, in the his complaint in action no. 2 and in his reply affidavit dated September 2, 2011, Peter Garcia denies that
he took as much money above his share as contended by the Corporate Entities, he concedes that he took as much as $715,000 in excess distributions.
Prior to the commencement of the instant actions, All-Boro and JMP, in resolutions dated August 17, 2010, and signed by Michael Garcia and Joaquin Garcia, barred Peter Garcia from the offices of those companies, removed his authority to be a signatory on the companies' bank accounts and to enter into any financial obligations on the behalf of the companies, and reduced his weekly distributions.[FN1] Although Peter Garcia protested the reduction in his compensation, and obtained an agreement from the Corporate Entities that he would receive full compensation through December 2010, he stipulated that he would remain barred from participating in All-Boro and JMP's business (see copy of October 1, 2010, letter from Peter Garcia's counsel addressed to the Corporate Entities' counsel, attached as Exhibit A to the Corporate Entities' Order to Show cause).
When the portion of the agreement relating to continued compensation expired and All-Boro and JMP reduced his compensation, Peter Garcia moved for a preliminary injunction requiring All-Boro and JMP to reinstate his compensation/distributions from All-Boro and JMP during the pendency of this action. In addressing this motion, the court, on January 26, 2011, the court ordered All-Boro and JMP to resume making weekly payments to Peter Garcia in the amounts of $2,000 and $1,500 respectively. The order further provided, as is relevant that, "Such payments shall be characterized as a loan to [Peter Garcia] without waiver of or prejudice to [Peter Garcia's] right to argue that he is entitled to such payments as [his] distributions. Furthermore, the repayment of such loans, if they remain so characterized, shall be secured by a pledge to JMP and All-Boro of [Peter Garcia's] membership interest in All-Boro."
In July 2011, the Corporate Entities made their motion to discontinue making the payments required by the January 26, 2011 order, primarily arguing that, given the amount of money Peter Garcia owes the Corporate Entities and his remaining interest in the companies, there is no justification for continuing to require the Corporate Entities to make the payments required by that order. This motion was submitted on July 29, 2011.
Thereafter, All-Boro and JMP, by way of notices signed by Joaquin and Michael Garcia, gave Peter Garcia notice that a meeting would be held on August 19, 2011, to determine whether Peter Garcia should be expelled as a member/manager of those entities. [*4]Before the date of the meeting, Peter Garcia made the instant motion for a preliminary injunction restraining Michael and Joaquin Garcia from expelling him from JMP and All-Boro. Prior to submission of Peter Garcia's motion, All-Boro and JMP held a meeting on August 19, 2011, attended by Peter, Michael, and Joaquin Garcia, at which Joaquin and Michael Garcia passed resolutions expelling Peter Garcia as a member and manager from JMP and All-Boro based on his unauthorized withdrawal and use of company funds.
Turning first to Peter Garcia's motion, the court may grant a preliminary injunction when the moving party demonstrates: (1) likelihood of ultimate success on the merits; (2) irreparable injury if the court withholds provisional relief; and (3) a balance of the equities tipping in the moving parties favor (Doe v Axelrod, 73 NY2d 748, 750 ). Preliminary injunctions are a drastic remedy and therefore as a general rule, the court issues them cautiously (Uniformed Firefighters Assn. of Greater New York v City of New York, 79 NY2d 236, 241 ).
In addressing his likelihood of ultimate success on the merits, Peter Garcia argues that Michael and Joaquin Garcia cannot expel him from All-Boro and JMP because Joaquin Garcia had retired or withdrawn from both of those entities, and, as such, there could be no majority vote to expel him, and because the operating agreements for All-Boro and JMP do not contain mechanisms for expelling members. As the determination of the issues of retirement, withdrawal and expulsion turn on the contents of the respective operating agreements and the provisions of the Limited Liability Company Law, this court will address the operating agreements and law first before addressing the parties' factual arguments.
Under the Limited Liability Company Law, the operation of a limited liability company is generally governed by the terms of the company's operating agreement (see Matter of 1545 Ocean Ave., LLC, 72 AD3d 121, 128-129 ; Matter of Spires v Lighthouse solutions, LLC, 4 Misc 3d 428, 433 [Sup Ct, Monroe County 2004]; Limited Liability Company Law §§ 102[u], 417[a]). The default provisions of the Limited Liability Company Law relating to a company's operation only apply where there is no operating agreement, or the operating agreement does not address a certain matter (see Matter of 1545 Ocean Ave., LLC, 72 AD3d at 129; Matter of Spires, 4 Misc 3d at 433). As such, where there is an operating agreement, the rights and obligations of the members of a limited liability company are initially determined through a contract-based analysis (see Matter of 1545 Ocean Ave., 72 AD3d at 128).
Here, under a heading "DISSOCIATION OF A MEMBER" the operating agreements for both JMP and All-Boro contain identically worded provisions stating, in relevant part, that:
Dissociation. A Person shall cease to be a Member upon the happening of any of the following events:
(a) the withdrawal, retirement or expulsion of a Member;
(b) the bankruptcy of a Member;
(c) in the case of a Member who is a natural person, the death of the Member or the [*5]entry of an order by a court of competent jurisdiction adjudicating the Member incompetent to manage the Member's personal estate (Operating Agreements § 11.1).[FN2]
The rights of a dissociating member are governed by section 11.2 of the Operating Agreements and are different depending on whether or not the dissociation results in a dissolution of the company under section 12.1(c) of the Operating Agreements. Of note, section 12.(c) provides that the dissociation of any member will cause a dissolution "unless at the time of such Dissociation there are at least two remaining Members and the Company is continued with the consent of all of the remaining Members within 180 days after such Dissociation.." The Operating Agreements, however, do not specifically provide the procedural mechanisms for a member's withdrawal, retirement or expulsion. As such, the procedural mechanism must either be implied from the terms of the Operating Agreement or be based on the default provisions of the Limited Liability Company Law.
With respect to a member's withdrawal, both Operating Agreements, which were filed with the Secretary of State before 1999, are governed by the provisions of former Limited Liability Company Law § 606 (see Limited Liability Company Law § 606[b]; L 1999, ch 420, § 3). That provision provides:
A member may withdraw as a member of a limited liability company at the time or upon the happening of any of the events specified in the operating agreement and in accordance with the operating agreement or unless otherwise provided in the operating agreement, with the vote or written consent of at least two-thirds in interest of the members, other than the member who proposes to withdraw as a member of the limited liability company. If such consent is not given, and if the operating agreement does not specify the time or the events upon the happening of which a member may withdraw, a member may, unless prohibited by the operating agreement, withdraw upon not less than six months' prior written notice to the limited liability company. If such withdrawal violates the provisions of the operating agreement, the limited liability company may recover from the withdrawing member damages for breach of the operating agreement, which may be determined as set forth in the operating agreement, and offset the damages against the amount otherwise distributable to him or her. Notwithstanding anything to the contrary set forth in this chapter or under applicable law, an operating agreement may provide that a member may not withdraw from a limited liability company or assign his or her membership interest prior to the dissolution and winding up of the limited liability company (former Limited Liability Company Law § 606).
Since the Operating Agreements here provide that a member may withdraw, but do not [*6]provide a mechanism for that withdrawal, any withdrawal is governed by the default mechanism of former Limited Liability Company Law § 606.[FN3]
How to address retirement presents a somewhat more difficult question. Retirement is not defined in the Operating Agreements, and there is no provision of the Limited Liability Company Law that expressly addresses retirement. In the absence of a forced retirement requirement, however, implicit in the term retirement is that it involves a voluntary withdrawal from the workplace (see Bayersfeld v Board of Educ. of Morrisville-Eaton Cent. School Dist., 46 AD3d 1003, 1005 , lv denied 10 NY3d 704 ).[FN4] While retirement may have different ultimately consequences for the person retiring (see Bayersfeld, 46 AD3d at 1005), there is no apparent reason here to consider retirement as anything other than a form of withdrawal from a limited liability company. As such, and in the absence of contrary provisions in the Operating Agreements, retirement from JMP and
All-Boro is governed by the withdrawal requirements of former Limited Liability Company Law § 606.
There is no Limited Liability Company Law provision addressing the expulsion of a member. As such, in the absence of a provision in the operating agreement providing for expulsion, a limited liability company cannot expel a member (see Man Choi Chiu v Winston Chiu, 71 AD3d 646, 647 ). Here, however, the Operating Agreements expressly and unambiguously provide that expulsion is one means of member dissociation (see Ross v Nelson, 54 AD3d 258, 259 , appeal dismissed 11 NY3d 906 ; Risk Management Servs., L.L.C. v Moss, 40 So3d 176, 181-182 [La Ct App 2010], writ denied 44 So3d 683 [La 2010]). Peter Garcia nevertheless argues that JMP and All-Boro cannot expel him because the Operating Agreements do not provide a mechanism for expulsion. Since a procedure for expulsion can be reasonably implied from the terms of the Operating Agreement (see N.E.D. Holding Co., Inc. v McKinley, 246 NY 40, 45 ; Read v Henzel, 67 AD2d 186, 189 ; Risk Management Servs., L.L.C., 40 So3d at 182), the failure to provide an express mechanism for expulsion does not affect All-Boro and JMP's right to expel Peter Garcia.
With respect to member expulsion, some guidance is provided by the portion of the operating agreement addressing member voting. This section provides, as is relevant here, that:
Any matter that requires the vote or consent of the Members shall be decided by the [*7]Members holding at least a majority of the Membership Interests, except that (a) the assignment of a Membership Interest and the admission of a Substitute Member shall require the approvals set forth in Sections 10.2 and 10.3, and (b) the following actions shall require the consent of all of the Members:
(a) any amendment to the Agreement or the Articles;
(b) the sale of Company Property other than in the ordinary course of business;
(c) the merger or consolidation of the Company with any other Person;
(d) the continuation of the Company after a Dissolution Event;
(e) the borrowing of funds or the pledging, mortgaging or otherwise encumbering of any Company Property, except in the ordinary course of business;
(f) the admission of a new Member; and
(g) the requirement that Additional Contributions be made. (Operating Agreements § 6.1).[FN5]
Since this member voting provision does not list expulsion of a member as one of the actions requiring the consent of all the members, expulsion can be accomplished by a vote of the majority of the membership interest. In addition, the fact that expulsion may be accomplished by a majority vote does not leave minority members unduly exposed to the risk of expulsion since an implied condition of any such expulsion is that it would be for cause (see Ostrom v Greene, 161 NY 353, 362 [implied condition of membership in voluntary organization is that each member can remain a member until he or she resigns, is removed for cause, or ceases to be a member in accordance with some regulation]; Zuckerwise v Sorceron, Inc., 289 AD2d 114 [in absence of contrary provision in contract, covenant of good faith and fair dealing would preclude termination of consulting contract without cause]; Carter v Bradlee, 245 App Div 49, 50 [employee hired pursuant to contract of fixed duration cannot be terminated without cause], affd 269 NY 664 ). Of note, the Court of Appeal of Louisiana found that a limited liability company could expel a member based on similar language contained in an operating agreement (see Risk Management Servs., L.L.C., 40 So3d at 182), and a Supreme Court, New York County judge found that an operating agreement provision merely providing that "[majority member] may require Jain to withdraw for cause (and only cause) at any time" allowed an limited liability company to remove a member for cause (see Jain v Rasteh, Sup Ct, New York County, Aug. 13, 2009, Schweitzer, J., index No. 109920/09). Accordingly, contrary to Peter Garcia's contentions, this court finds that the absence of a specific mechanism for expulsion does not preclude expulsion under All-Boro and JMP's operating agreements.
Nevertheless, as noted above, Peter Garcia contends that Joaquin Garcia had retired [*8]from both JMP and All-Boro, and thus, absent Joaquin Garcia's vote, there was no majority of members who could vote to expel Peter Garcia. Peter Garcia's proof with respect to All-Boro includes his assertion, contained in his September 2, 2011 reply affidavit, that on June 1, 2003, paragraph 6.1 of the operating agreement was amended to reflect that Peter Garcia and Michael Garcia were the "Managing Members" of All-Boro, and on a separate sheet, Schedule A of All-Boro's operating agreement was amended to provide that Peter Garcia and Michael Garcia each had a 45 percent interest and that Joaquin Garcia had a 10 percent interest. In the September 2, 2011 reply affidavit, Peter Garcia concedes that Joaquin Garcia did not sign these amendments, but asserts that Joaquin Garcia consented to them, and requested that Peter Garcia sign the amendments on his behalf pursuant to a power of attorney. Peter Garcia further asserts that by 2007, Joaquin Garcia had conceded that he had been sufficiently compensated for his capital contribution to All-Boro, and that Peter and Michael Garcia bought out Joaquin Garcia's interest in All-Boro in July 2008. This buyout is allegedly shown by an amendment to the operating agreement dated July 8, 2008 and signed by Peter Garcia and Michael Garcia, in which they represent that Joaquin Garcia had "withdrawn" from All-Boro and that Peter Garcia and Michael Garcia each had a 50 percent interest in All-Boro. The buyout is also alleged to be shown by a purported "buyout" payment of $202,142 noted in All-Boro's record of accounts. Finally, in this regard, Peter Garcia asserts that All-Boro made no distributions to Joaquin Garcia after this buyout and did not issue him any Schedule K-1 tax forms after that date.
Notably absent from Peter Garcia's submissions is a copy of any writing from Joaquin Garcia giving notice to All-Boro or its members of his intent to withdraw or retire from All-Boro, or that he in any way consented to having his interest in All-Boro bought out. Although former Limited Liability Company Law § 606 does not appear to require a request to withdraw from a limited liability company to be made in any particular form,[FN6] it would
appear that written notice would have been required by the notice provision of the Operating Agreements (Operating Agreements § 13.1).[FN7]
In any event, to the extent that written notice was not required by the Operating [*9]Agreements or any such requirement could have been waived by Joaquin Garcia (cf. Bell v Walton, 861 A2d 687, 689 [Me 2004][barring waiver of Maine's statutory written notice requirement for member withdrawal]), Peter Garcia's only proof that Joaquin Garcia desired to withdraw primarily turns on his own credibility. While the July 8, 2008 amendment signed by Michael and Peter Garcia, in which they represent that Joaquin Garcia had withdrawn from All-Boro, may satisfy the vote or written consent to withdrawal by the remaining two thirds interest in the limited liability company as required by former Limited Liability Company Law § 606, it is not evidence that Joaquin Garcia had sought to withdraw. Concededly, All-Boro's accounts show a payment to Joaquin Garcia that is designated a "buyout."[FN8] Joaquin Garcia, however, denies receiving any such payment and Peter Garcia provides no evidence, such as a canceled check, that such a payment was actually made. All-Boro's 2008 K-1 statement for Joaquin Garcia (supplied by Peter Garcia) shows that All-Boro made distributions to him for that year in the amount of $569,395. This K-1 statement, however, does not break down the distributions by the nature of the payment, and given Peter Garcia's assertion that some of All-Boro's properties were sold that year, the distribution shown in the K-1 could simply reflect Joaquin Garcia's distributive share of those sales. Finally, Joaquin Garcia cannot be deemed to have ratified his withdrawal based on evidence that All-Boro stopped making distributions and issuing K-1 statements after July 2008 (see Poughkeepsie Sav. Bank v Sloan Mfg. Co., 84 AD2d 212, 218 ).
Turning to JMP, Peter Garcia asserts that Joaquin Garcia has retired to live in Puerto Rico, and has not participated in JMP as an employee, a service provider or as a member or managing member since July 2004. As evidence of Joaquin Garcia' retirement, Peter Garcia has submitted copies of a series of e-mails between Joaquin Garcia and Tony Garcia, another of his brothers, in which Joaquin Garcia discussed buying out Tony Garcia's interest in a vacation home in Puerto Rico in order to use it as his permanent retirement home. None of this proof, however, shows that Joaquin Garcia gave notice to JMP that he intended to withdraw or retire and an e-mail to a brother who is not a member of JMP does not arise to such notice. In addition, there is no evidence that the remaining two thirds interest in JMP consented to Joaquin Garcia withdrawing from JMP. Without evidence that JMP consented to Joaquin Garcia withdrawing, the absence of any written notice from Joaquin Garcia requesting withdrawal from JMP precludes a finding of withdrawal pursuant to former Limited Liability Company Law § 606.
Accordingly, at best, Peter Garcia has shown a possible factual issue as to whether Joaquin Garcia retired or withdrew from All-Boro. There is thus a strong likelihood that Joaquin Garcia remained a member of All-Boro, and with Michael Garcia, he had a majority to expel Peter Garcia from All-Boro. Peter Garcia has not even shown the existence of a factual issue with respect to Joaquin Garcia's withdrawal from JMP, and Joaquin Garcia and [*10]Michael Garcia thus had a majority interest in JMP sufficient to vote to expel Peter Garcia from JMP. Given Peter Garcia's concessions that he took more than his share of distributions from both All-Boro and JMP, there is no real dispute that Michael and Joaquin Garcia had cause to expel him from both All-Boro and JMP. Under these circumstances, Peter Garcia has failed to demonstrate the likelihood of his success on the merits (see Cooper v Board of White Sands Condominium, ___ AD3d ___, 931 NYS2d 696, 697 ). It is noted that the CPLR expressly provides that the existence of factual issues alone does not justify denial of a motion for a preliminary injunction (CPLR 6312[c]; 1234 Broadway LLC v West Side SRO Law Project, Goddard Riverside Community Ctr., 86 AD3d 18, 23 ; Sau Thi Ma v Xuan T. Lien, 198 AD2d 186, 187 ). Nevertheless, the factual issues here subvert Peter Garcia's "likelihood of success on the merits . . . to such a degree that it cannot be said that . . . [he] established a clear right to relief" (Cooper, 931 NYS2d at 697 [internal quotations omitted]; Omakaze Sushi Rest., Inc. v Ngan Kam Lee, 57 AD3d 497 ; Matter of Advanced Digital Sec. Solutions, Inc. v Samsung Techwin Co., Ltd., 53 AD3d 612, 613 ).
Aside from failing to show the likelihood of success on the merits, Peter Garcia has also failed to show that he would be irreparably harmed if the injunction is not granted. In this respect, Peter Garcia was locked out of the operation of All-Boro and JMP prior to the commencement of the action, and he has stipulated that he would not protest this lockout during the course of this action. As such, the only impact of his expulsion would be on his continued right to compensation. Accordingly, Peter Garcia has failed to show that any injury that he would suffer if his expulsion is ultimately found to have been improper would not be compensable by money damages (see Rowland v Dushin, 82 AD3d 738, 739 ; Jain v Rasteh, Sup Ct, New York County, Aug. 13, 2009, Schweitzer, J., index No. 109920/09; cf. Yemini v Goldberg, 60 AD3d 935, 937 ).
Finally, given Peter Garcia's concession that he took more than his share of distributions from both JMP and All-Boro, the equities do not weigh in his favor.
Accordingly, Peter Garcia has failed to demonstrate his entitlement to a preliminary injunction barring Michael and Joaquin Garcia from expelling him from JMP and All-Boro and his motion must thus be denied.
With regard to the Corporate Entities' motion, the January 26, 2011 order was granted at a time when it appeared that the parties might be able to settle their dispute in a relatively expeditious manner. As such, it did not appear that requiring All-Boro and JMP to continue paying compensation to Peter Garcia would cause any undue prejudice to the Corporate Entities. However, it has since become apparent that the parties are still very far apart with respect to the value of JMP and All-Boro and their respective interests therein, and are not going to reach a quick settlement of their disputes. Based on appraisals conducted since the time of the order, the corporate entities submit that Peter Garcia will owe All-Boro and JMP and/or Michael and Joaquin Garcia more money than the value of his interest in those entities. Although Peter Garcia disputes these appraisals, they certainly raise an issue with [*11]respect to the appropriateness of requiring the Corporate Entities to continue making payments of approximately $14,000 a month to Peter Garcia. Even though the payments are deemed a loan under the terms of the order, they are only secured by Peter Garcia's pledge of his interest in All-Boro and JMP. As such, if the Corporate Entities' appraisals are correct, and Peter Garcia has already taken more than the value of his interest in those entities, the Corporate Entities have no security for the loans. Under these circumstances, requiring the continued payment of to Peter Garcia is unduly prejudicial to the Corporate Entities, and constitutes a changed circumstances warranting vacutur of the January 26, 2011 order (see Dutchess Sanitation Serv. v Town of Plattekill, 51 NY2d 670, 673-674 ; Litas Inv. Co. v Vebeliunas, 148 AD2d 680, 682 ). While not part of the record of with respect to the Corporate Entities motion, it would also appear that the expulsion of Peter Garcia from All-Boro and JMP would also constitute a changed circumstance warranting
vacatur of the January 26, 2011 order (see Litas Inv. Co., 148 AD2d at 681-682). As such, the Corporate Entities motion is granted, and this court's January 26, 2008 order is vacated.This constitutes the decision and order of the court.
E N T E R,
J. S. C.
Footnote 1: Copies of these resolutions are attached as exhibits to Peter Garcia's motion, by way of order to show cause, that was signed on January 20, 2011.
Footnote 2: Subsections d through g of section 11.1 of the Operating Agreements are inapplicable to the members here, as they address events causing dissociation for members who are trusts, separate organizations, corporations and estates.
Footnote 3: This court expresses no opinion with respect to how a provision allowing withdrawal, but providing no express mechanism for withdrawal would be treated under the current version of Limited Liability Company Law § 606(a).
Footnote 4: As is relevant here, retirement is defined as "removal or withdrawal from an office or active service" (Random House Webster's College Dictionary, 1150 ), and retire is defined as "to give up or withdraw from an office, occupation, or career, usu. because of age" (Random House Webster's College Dictionary, 1150 ).
Footnote 5: Although Peter Garcia represents that section 6.1 of All-Boro's operating agreement was amended to make him and Michael Garcia its managers, the member voting requirements are not changed in the purported amendment.
Footnote 6: Former Limited Liability Company Law § 606 only expressly requires "written notice" of an intent to withdraw when consent is not given for member's withdrawal.
Footnote 7: Operating Agreements § 13.1 provides:
Notices. Notices to the Company shall be sent to the Principal Office of the Company. Notices to the Members shall be sent to their addresses set forth on Schedule A. Any Member may require notices to be sent to a different address by giving notice to the other Members in accordance with this Section 13.1. Any notice or other communication required or permitted hereunder shall be in writing, and shall be deemed to have been given with receipt confirmed if and when delivered personally, given by prepaid telegram or mailed first class, postage prepaid, delivered by courier, or sent by facsimile to such Members at such address (emphasis added).
Footnote 8: Peter Garcia also does not explain how he and Michael Garcia could purchase Joaquin Garcia's interest in All-Boro through a payment made by All-Boro.