On March 15, 2023, Justice Ruchelsman of the Kings County Commercial Division issued a decision in Matter of Vashovsky v. Zablocki, 2023 NY Slip Op. 30768(U), rejecting a claim for common-law dissolution of an LLC, explaining:
However, it is. well settled that to state a claim for common law dissolution [of a corporation] the minority shareholder must plead factual allegations giving rise to fraud, misappropriation or personal use of corporate assets. Thus, common-law dissolution remains a viable cause of action in New York. Where statutory dissolution is unavailable then shareholders in that situation have had, and continue to have, recourse in the form of common law dissolution. Common law dissolution, which predates BCL § 1104-a is an equitable cause of action which permits shareholders below the 20% ownership threshold to seek dissolution of a private corporation under certain circumstances of malfeasance. Although common-law dissolution cases are, relatively rare in New York, a body of case law has evolved (and continues to evolve) that sheds light on this cause of action, the burden of proof necessary to sustain such a cause of action, and the available remedies if liability is found to exist. However, that legal remedy is not available in limited liability companies. In Matter of 1545 Ocean Avenue LLC, 72 AD3d 121, 893 NYS2d 590 [2d Dept., 2010] the court held that the sole basis for dissolution of a limited liability company were the grounds outlined in Limited Liability Company Law §702, namely judicial dissolution upon proof that it is not reasonably practicable to carry on its business in conformity with the articles of organization or operating agreement. This is a more stringent standard than the dissolution of an ordinary corporation. Thus, the second amended complaint did not really allege a viable cause of action since in all likelihood there is no common law dissolution ·of a limited liability corporation.
(Internal quotations and citations omitted) (emphasis added).