Practice point: A limited liability company's organizer is a fiduciary of the investors it solicits to become members, pursuant to Limited Liability Company Law § 203[a][iii]).
Students should note that the fiduciary duty includes the obligation to disclose any interests that might affect the company and its members, including profits that the promoter makes from organizing the company.
Case: Roni LLC v. Arfa, NY Slip Op 04700 (1st Dept. 2010)
Here is the opinion.
Tomorrow's issue: Motion practice.
