WILLIAM C. STYSLINGER III v. BREWSTER PARK, LLC, et al., SC 19489

Judicial District of Bridgeport

 

      Limited Liability Companies; Whether Assignee of Member's Interest in Limited Liability Company has Standing Under § 34-208 to Seek Court Orders Dissolving Company and Winding up its Affairs.  The plaintiff brought this action against Brewster Park, LLC (Brewster Park) and its member Michael Weinshel, alleging that Weinshel refused to distribute to the plaintiff income and shares of Brewster Park that he was entitled to as assignee of his ex-wife's membership interest in the company.  The plaintiff claimed that Weinshel's wrongful actions constituted breach of his fiduciary duties as a Brewster Park member and that it was no longer practicable to continue operating the company.  He sought court orders dissolving the company and appointing a receiver to distribute its assets.  The defendants moved to dismiss the action, claiming that the plaintiff, as a nonmember of Brewster Park, lacked standing to seek a judicial dissolution or involuntary winding up of the company.  The plaintiff argued that he had standing under General Statutes § 34-208 of the Connecticut Limited Liability Company Act (act), which provides that: "(a) Except as otherwise provided in the operating agreement, the business and affairs of the limited liability company may be wound up . . . (2) on application of any member . . . or assignee thereof, by the superior court . . . if one or more of the members or managers . . . have engaged in wrongful conduct, or upon other cause shown."  After reviewing the language of § 34-208 and its relationship to other statutes, the trial court granted the motion to dismiss on the ground that § 34-208 does not confer standing on a mere assignee of a membership interest in a limited liability company to seek judicial dissolution or involuntary winding up of the company.  The court reasoned that General Statutes § 34-207 provides for the judicial dissolution of a limited liability company upon application by or for a member and that § 34-208 only identifies the persons or entities that may participate in the winding up an already dissolved company.  It also found that § 34-207 did not apply here because the plaintiff was not a Brewster Park member and did not claim to be applying for its dissolution on behalf of a member.  In addition, it stated that no other provision in the act expressly accords assignees the right to seek dissolution.  Moreover, the court observed that, although the legislature has expressly provided that a transferee of a partnership interest has standing to seek judicial dissolution of a partnership, the legislature has declined to do the same with respect to assignees of membership interests in limited liability companies.  It thus concluded that, as the plaintiff lacked standing, it was without jurisdiction to dissolve the company, appoint a receiver, or order the winding up of the company’s affairs.  The plaintiff appeals, and the Supreme Court will decide whether the trial court properly ruled that the plaintiff, as an assignee of a membership interest in Brewster Park, does not have standing under § 34-208 to seek orders dissolving Brewster Park and winding up its affairs.