K-1s Not Dispositive Proof of Partnership Interests

On November 28, 2017, the First Department issued a decision in Rakosi v. Sidney Rubell Co., LLC, 2017 NY Slip Op. 08341, holding that K-1s were not dispositive proof of a partnership interest, explaining:

Defendants present the entities' K-1s as dispositive proof that Rubell family LLC-transferees of Rubell's interests are entity partners; however, such documents, standing alone, do not prove an express partnership exists. They may be relevant to the inquiry, but are not determinative.

(Internal citations omitted).

A significant part of our practice is litigating disputes between the owners of closely-held business entities such as partnerships, limited liability companies or corporations. Often called business divorces, these disputes can be as complex and contentious as any marital divorce. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions about a New York business divorce.