Real Estate Litigation Partners Gregg Martin and Ann Lee secured a $11.2 million settlement on behalf of their clients in a complex dispute among members of a limited liability company involving the management, control, and ultimate sale of a 14-story office building in Encino, California.
The matter arose from a long-running corporate governance and control dispute between managing and non-managing members of the LLC, including disagreements over voting rights, fiduciary obligations, and the proposed sale and dissolution of the company. After years of contested proceedings, the settlement provides for the buyout of the clients' ownership interests and a complete resolution of all claims.
The dispute began in 2019, when the LLC's manager sought to sell the property over the objection of the clients, who were non-managing members. The manager initiated dissolution proceedings, and the clients moved to purchase the manager's interest. The litigation that followed spanned more than seven years and included appellate proceedings concerning control and voting rights within the company.
Following the appeal, the manager proceeded with the sale of the property but did not distribute the sale proceeds. Mr. Martin and Ms. Lee successfully obtained a court order requiring distribution and further secured the appointment of a neutral receiver to replace the manager—critical steps that began shifting the leverage in the case.
The clients asserted claims for fraud, breach of fiduciary duty, breach of the operating agreement, and equitable buyout, and sought to unwind both the dissolution of the LLC and the sale of its primary asset. Through sustained motion practice and court intervention, the team obtained key internal books and records that had not previously been produced. Those materials proved central to evaluating the parties' respective positions and ultimately facilitated resolution.
"This was a hard-fought matter involving deeply contested issues of control and fiduciary responsibility," said Gregg Martin. "Notwithstanding the complexities of the litigation, our clients remained committed to pursuing their claims, and our strategy focused on obtaining the documents necessary to fully understand and present the facts. That process ultimately positioned the case for resolution."
"Obtaining the company's books and records required persistent effort over several years," added Ann Lee. "Once those materials were produced, they provided critical insight into the underlying transactions and helped bring the matter to a conclusion."
Gregg Martin and Ann Lee represented the clients throughout the litigation. They achieved this result with support from litigation partner Ira Steinberg.