2006 New York Code - Interested Managers.



 
    §  411.  Interested  managers.  (a)  No  contract or other transaction
  between a limited liability company and one or more of its managers,  or
  between  a  limited  liability  company  and any other limited liability
  company or other business entity in which one or more  of  its  managers
  are  managers,  directors  or  officers, or have a substantial financial
  interest, shall be either void or voidable for this reason alone  or  by
  reason alone that such manager or managers are present at the meeting of
  the  managers,  or  of  a class thereof, which approves such contract or
  transaction, or that his or her or their  votes  are  counted  for  such
  purpose:
    (1)  if  the  material  facts  as  to  such manager's interest in such
  contract  or  transaction  and  as  to  any  such  common   managership,
  directorship,  officership  or  financial interest are disclosed in good
  faith or known to the other managers  or  class  of  managers,  and  the
  managers  or  such  class approve such contract or transaction by a vote
  sufficient for such purpose without counting the vote of such interested
  manager or, if the votes of the disinterested managers are  insufficient
  to  constitute  an  act of the managers pursuant to section four hundred
  eight of this article, by unanimous vote of the disinterested  managers;
  or
    (2)  if  the  material  facts  as  to  such manager's interest in such
  contract  or  transaction  and  as  to  any  such  common   managership,
  directorship,  officership  or  financial interest are disclosed in good
  faith or known to  the  members  entitled  to  vote  thereon,  and  such
  contract or transaction is approved by vote of such members.
    (b)  If  such  good  faith  disclosure of the material facts as to the
  manager's interest in the contract or transaction and  as  to  any  such
  common  managership,  directorship, officership or financial interest is
  made to the managers or members, or known to the managers  or  class  of
  managers  or members approving such contract or transaction, as provided
  in subdivision (a) of this section, the contract or transaction may  not
  be avoided by the limited liability company for the reasons set forth in
  subdivision  (a)  of  this  section.  If there was no such disclosure or
  knowledge, or if the vote of such interested manager was  necessary  for
  the  approval  of  such  contract  or  transaction  at  a meeting of the
  managers or class of managers at which  it  was  approved,  the  limited
  liability company may avoid the contract or transaction unless the party
  or  parties  thereto  shall establish affirmatively that the contract or
  transaction was fair and reasonable as to the limited liability  company
  at  the time it was approved by the managers, a class of managers or the
  members.
    (c) Common or interested managers may be counted  in  determining  the
  presence  of  a  quorum  at  a  meeting of the managers or of a class of
  managers that approves such contract or transaction.
    (d) The operating agreement may  contain  additional  restrictions  on
  contracts  or  transactions  between a limited liability company and its
  managers and may provide that contracts or transactions in violation  of
  such  restrictions  shall  be  void or voidable by the limited liability
  company.
    (e) Unless otherwise provided in the operating agreement, the managers
  shall have authority to fix the compensation of managers for services in
  any capacity.

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