Janet Levitt and Mark Levitt filed a lawsuit against Gilligan Village, LLC, Lauren Bivins, Milton Burnside, Sondra Burnside and Patricia Goldstein. Janet Levitt, Mark Levitt, Lauren Bivins, Milton Burnside, Sondra Burnside and Patricia Goldstein are members of Gilligan Village. The individual defendants are each related by blood, marriage or are otherwise closely associated. Pursuant to section 4.2 of the LLC’s operating agreement, Mark Levitt was appointed manager of Gilligan Village after the death of its initial manager, Edward R. Bivins.
During his tenure as manager, Mark Levitt pursued the sale of Gilligan Village’s principal asset, a parcel of real estate. Shortly thereafter, Lauren Bivins, Sondra Burnside and Patricia Goldstein removed Mark Levitt from the position of manager and appointed Lauren Bivins (Edward Bivins’ widow and the personal representative of his estate) as his successor. The alleged motivation for this action was to prevent the sale of the property in order to ensure that
Bivins Properties, LLC (Bivins Properties), a separate company owned by Lauren Bivins, continued to receive a fee for managing the property.
What legal and ethical issues are apparent in these events? Have fiduciary duties owed to the LLC been violated? Are there any additional facts that we would need to find out in order to resolve this dispute?