Cole Schotz Prevails on Behalf of Assisted Living Network in Years-Long Membership Dispute
Cole Schotz P.C. secured a major victory for client CareOne, LLC in a complex, five-year legal dispute around the removal of two minority members of the Delaware limited liability company that owns and operates assisted living and skilled nursing home facilities primarily throughout New Jersey.
On November 23, the New Jersey Superior Court, Bergen County, Chancery Division granted summary judgment in CareOne’s favor on all counts, including approving the company’s claim for a declaratory judgment determining that the removal and buy-out of the minority members was authorized and appropriate. The Cole Schotz team was able to obtain the Court’s approval of the approximately $500,000 buy-out for each minority member, who had demanded in excess of $36 million in the aggregate.
The litigation spanned over five years in both federal district and state courts, involving novel issues under Delaware law. These included the propriety of the majority members’ amendment of the company’s limited liability company agreement to insert a buy-out formula simultaneously with their vote to remove the minority members and whether that buy-out formula provided adequate consideration to the removed minority members under Delaware law.
The Cole Schotz team that represented CareOne was led by Michael D. Sirota and Warren A. Usatine and consisted of member Rachel A. Mongiello, associates Michael C. Klauder and Jeffery M. Sauer, and paralegal Kathleen Ryan Sermabekian.
As the law continues to evolve on these matters, please note that this article is current as of date and time of publication and may not reflect subsequent developments. The content and interpretation of the issues addressed herein is subject to change. Cole Schotz P.C. disclaims any and all liability with respect to actions taken or not taken based on any or all of the contents of this publication to the fullest extent permitted by law. This is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Do not act or refrain from acting upon the information contained in this publication without obtaining legal, financial and tax advice. For further information, please do not hesitate to reach out to your firm contact or to any of the attorneys listed in this publication.
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