I would like to clarify remarks attributed to me in “NY Court Defines When LLCs Can Use Special Litigation Committees” (N.Y.L.J. Aug. 18, 2017) by Jason Grant. Part of the article addressed the issue of potential concerns raised if a person is selected as a one-person special litigation committee (SLC) by just one party in a dispute between partners in an LLC. The article focused on an August 15th Supreme Court, Appellate Division, ruling in a case in which the person selected as SLC was Mark Zauderer of Flemming Zulack Williamson Zauderer.
I do not know Mr. Zauderer or any of the parties involved in the dispute for which he was selected to serve as member of the SLC, nor did I have any prior knowledge of the particulars of the dispute when Mr. Grant contacted me. My understanding was that Mr. Grant was asking me to draw on my academic expertise in corporate law to address general principles at issue for anyone unilaterally selected as member of an SLC, and, as the article pointed out, I noted that the Appellate Division ruling made clear that “no one suggests [Mr. Zauderer] is in any way biased.”
The article went on to quote me as follows: “There is some question about who was chosen and why the defendants chose Zauderer,” he said. “The defendants picked him. They selected him unilaterally.”
This quote created a misimpression, since my intent was to speak in general terms about questions that might arise in any matter in which someone is unilaterally selected as member of an SLC—not about Mr. Zauderer specifically. I would like to clarify that I have no knowledge of any bias on Mr. Zauderer’s part and reiterate that the Appellate Division ruling stated that no one had suggested he is biased.
George T. Lowy Professor of Law,
New York University School of Law