Haynes Boone secured a significant victory for JS Real Estate Investments, LLC and TR Real Estate, LLC, successfully defending their control of Yards at NoDa, LLC, an apartment complex in Charlotte’s North Davidson neighborhood. The Supreme Court of North Carolina affirmed summary judgment in favor of Haynes Boone’s clients, ending nearly a decade of litigation and preserving their governance rights in the venture.
The plaintiff, Gvest, claimed that membership interests had been transferred to new holding companies without proper consent and further alleged unfair treatment and constructive fraud. The Business Court ruled, and the Supreme Court affirmed, that the attempted transfers were invalid because mandatory provisions of the Operating Agreement were not followed, and that no special duties exist under North Carolina law for a coalition of minority LLC members.
Haynes Boone Partner Chelsea Corey led the defense and ensured that the Business Court’s decision was upheld, protecting the rights of the defendants and clarifying the application of LLC operating agreements in business disputes.
“This case highlights the importance of strict compliance with operating agreements in LLCs,” said Corey. “We are proud to have a positive outcome that reinforces contractual clarity and provides guidance for future disputes in North Carolina."
Haynes Boone’s Litigation Practice Group takes a client-centered, creative, flexible and practical approach to commercial litigation. The firm’s skilled and experienced trial teams have won numerous successful jury and bench verdicts for their clients. Additionally, the group's nationally recognized appellate team works closely with trial lawyers to ensure a complete and proper record is preserved at trial in case an appeal is filed. They represent a range of clients, in terms of both size and industry.
