## Facts

- Jeffrey Pikus formed Ten Sheridan Associates, LLC to purchase, own, and operate an apartment building.
- Pikus needed help financing the acquisition and enlisted Stuart Goldstein, who joined Ten Sheridan Associates as a member and manager.
- Pikus and Goldstein executed an operating agreement governing the LLC’s management and the parties’ rights.
- The operating agreement provided that Goldstein’s management company, SDG Management Corporation, would manage the property.
- The operating agreement also provided that Pikus would receive a supervisor fee equal to 37.5% of the management fee paid to SDG Management Corporation.
- Under the operating agreement, Pikus and Goldstein had equal voting rights.
- The operating agreement further required unanimous consent for a partial or full liquidation or dissolution of the LLC.
- After nearly two decades of operations, disputes arose between Pikus and Goldstein, centered on Pikus’s desire to sell or refinance the property.
- Goldstein claimed Pikus engaged in misconduct (including allegedly delaying unit renovations) to push a premature sale or refinancing.
- In response to the conflict, Goldstein froze Pikus out of management and stopped paying Pikus the supervisor fee.
- Pikus asserted he retained management rights because, according to Pikus, he and Goldstein had orally modified the operating agreement to give Pikus an active supervisory role in property management.
- Goldstein sued Pikus seeking (1) declaratory relief regarding the operating agreement and (2) a permanent injunction barring Pikus from participating in management of the property.
- Pikus asserted 13 counterclaims, and the dispute was heard in the New York Supreme Court.

## Issues

1. Whether the LLC operating agreement controlled the parties’ management rights and voting authority, or whether Pikus could rely on an alleged oral modification to expand his management role.
2. Whether Goldstein was entitled to declaratory relief construing the operating agreement and confirming that Pikus lacked authority to participate in management absent Goldstein’s consent.
3. Whether Goldstein could obtain a permanent injunction preventing Pikus from participating in management, given the parties’ ongoing disputes and Pikus’s asserted contractual and fee-related rights.
4. Whether, and to what extent, Pikus’s counterclaims could proceed in light of the operating agreement’s written terms governing management authority and the supervisor-fee arrangement.

## Decision

- The New York Supreme Court addressed Goldstein’s requests for declaratory and injunctive relief concerning the operating agreement and management control of the LLC.
- The court also addressed Pikus’s counterclaims arising from the parties’ dispute over management authority, the supervisor fee, and the alleged oral modification of the operating agreement.
- The materials provided here include an authoritative factual summary but do not include the slip opinion’s text; therefore, this brief does not state the court’s specific rulings, reasoning, or the precise disposition of any claims or counterclaims.

## Legal Principles

- An LLC operating agreement is generally treated as a contract, and its written terms ordinarily govern member and manager rights and obligations, including management authority, voting, and economic arrangements such as fees.
- A party asserting an oral modification to a written agreement commonly must show the modification is legally effective under New York contract rules and consistent with any contractual limits on oral changes.
- Declaratory relief is sought to obtain a binding judicial determination of the parties’ rights and obligations under an agreement where an actual controversy exists.
- A permanent injunction is an equitable remedy that typically requires a showing of entitlement to relief on the merits and that money damages alone would not adequately address the harm.
- Disputes between LLC co-managers frequently involve claims about authority, fiduciary-type conduct in management, and compliance with agreed governance processes, especially where equal voting rights and unanimity requirements constrain unilateral action.

## Conclusion

Goldstein v. Pikus concerns a long-running LLC relationship that deteriorated into a control dispute over whether the property should be sold or refinanced, whether Pikus could take an active management role based on an alleged oral modification, and whether Goldstein could bar Pikus from management while withholding the supervisor fee set by the operating agreement; the case proceeded in New York Supreme Court on Goldstein’s declaratory and injunction claims and Pikus’s counterclaims, but the exact holdings and disposition are not stated in the materials provided.


Goldstein v. Pikus, 2015 N.Y. Slip Op. 31455(U) (2015)