Nestlé CEO just got crunched in record time. NJ LLCs can do the same. When a partner’s conduct makes it “not reasonably practicable” to keep the company together, New Jersey’s RULLCA allows courts to expel the bad actor while preserving the business. I break down the doctrine, the key cases, and why a well-drafted operating agreement can save owners from a messy exit.
Remember the episode of Succession where Logan Roy promises Shiv the CEO position, only to pull it away once she’s fully committed? Or when he changes the rules, cutting his children out of distributions while enriching himself through side deals? That’s not just an exciting evening on the couch while enjoying your favorite home cooked meal (steak, always steak), it’s a textbook example of the kind of conduct that makes continued business operation legally “not reasonably practicable” under New York law. Under LLC Law § 702, the test is whether it is “not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.” When your business partner starts acting like Logan Roy, LLC Law § 702 becomes your exit strategy.
Member, Scarinci Hollenbeck, LLC. Partnership and Business Litigation Attorney with Passion for the Nexus between Technology and Ethics in the Legal Profession.
