The Right to Seek Dissolution by The Estate of a Deceased Member

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Posted on: Oct 27 2025

Under New York’s Limited Liability Company Law (“LLCL”) § 702, a court “may decree dissolution of a limited liability company whenever it is not reasonably practicable to carry on the business in conformity with the articles of organization or operating agreement.” The claim must be brought “[o]n application by or for a member” of the company.[1]

In Matter of Bodenchak v. 5178 Holdings LLC, 2025 N.Y. Slip Op. 05875 (1st Dept. Oct. 23, 2025) (here), the Appellate Division, First Department, examined the “by or for” language of LLCL § 702 in affirming the grant of a motion to substitute the estate of a deceased member for the decedent in the proceeding.[2]

Bodenchak was brought as a special proceeding in which the original petitioner, Frank Bodenchak (“Frank”), a minority investor in 5178 Holdings LLC (“5178”), sought both direct monetary damages and the judicial dissolution of 5178, a New York Limited Liability Company (“LLC”), pursuant to LLCL § 702. Frank died shortly after commencing suit. His widow, Dawn Bodenchak (“Dawn”), was appointed executor of his estate and moved to substitute as petitioner. Respondents opposed the motion, contending the estate could not maintain the dissolution portion of the proceeding under LLCL § 702. The motion court granted the motion. Respondents appealed. The First Department “unanimously affirmed”.

The issue on appeal concerned the request for judicial dissolution of 5178. As to the monetary damages claims, there was no dispute. Under Section 11-3.2(b) of New York’s Estates, Powers & Trusts Law, the personal representative of a decedent’s estate may bring or continue an action “[f]or any injury,” and “[n]o cause of action for injury to person or property is lost because of the death of the person in whose favor the cause of action existed.”[3] Thus, causes of action seeking monetary damages survive a decedent’s death, and the proper party to maintain an action to recover monetary damages is the decedent’s representative. In Bodenchak, the proper party to pursue Frank’s monetary damages claims was Dawn.

In addressing the request for dissolution of 5178, the Court looked to the LLCL. Under LLCL § 702, a dissolution action may be brought “[o]n application by or for a member.” The Court held that Dawn satisfied Section 702, stating “Petitioner’s application was made for decedent, a member of respondent 5178 Holdings, as executor of his estate.” Therefore, said the Court, defendants’ attempt to limit the scope of Section 702 to only members was “unavailing”.[4]

Under LLCL § 608, the estate of a deceased member “may exercise all of the member’s rights for the purpose of settling his or her estate or administering his or her property,”[5] regardless of whether the estate assumes “member” status.[6] Appellate and trial court cases interpreting LLCL § 608 have consistently made it clear that the statute means what it says.[7]

In Bodenchak, the Court held that “Decedent’s right to pursue dissolution passed to his estate upon his death.”[8] This was especially so, since “the dissolution proceeding [was] necessary to settle [Frank’s] estate and distribute the proceeds from the sale of the apartment owned by 5178 Holdings.”[9] Thus, contrary to the respondents’ contention, which the Court held was “also unavailing”, petitioner, as executor of Frank’s estate, had the authority to exercise Frank’s rights in the LLC for the purpose of settling the estate.[10]

Takeaway

In Bodenchak, the First Department reaffirmed an important point under the LLCL: the right to seek judicial dissolution of an LLC does not vanish upon a member’s death, when the dissolution proceeding is necessary to settle the deceased member’s estate. LLCL § 702 allows dissolution “on application by or for a member,” which the Court made clear includes actions brought by the estate of a deceased member.

The Court relied on LLCL § 608, which grants an estate the ability to exercise all of a deceased member’s rights for purposes of settling the estate, even if the estate (or its representative) does not become a member of the LLC. Thus, under LLCL § 608, Frank’s right to seek dissolution passed to his estate upon his death, particularly because the dissolution proceeding was necessary to settle the estate and distribute assets.

In short, the Bodenchak confirms that: (a) monetary damage claims survive a member’s death and can be pursued by the estate’s representative; (b) the estate of a deceased LLC member may seek judicial dissolution under LLCL § 702, when dissolution is necessary to settle the deceased member’s estate; and (c) LLCL § 608 empowers estates to exercise a deceased member’s rights for estate administration, regardless of membership status.

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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP. This article is for informational purposes and is not intended to be and should not be taken as legal advice.

[1] LLCL § 702.

[2] In prior articles, we examined substitution upon the death of a named party. See Death and Litigation, CPLR 1015(a) and the Death of a Party, and Death of a Litigant. We have also examined judicial dissolution of an LLC under LLCL § 702. See LLC Breakups And Judicial Dissolution: The Hurdles Are High, Issues Of Fact Preclude Dismissal Of Claim For Judicial Dissolution Of LLC, Breaking Up Is Hard To Do: Court Denies Motion To Dismiss Action For Dissolution of an LLC, Court Finds that Allegedly Ousted Member of LLC Has Standing to Seek Dissolution, and Court Reinforces the Fact that Judicial Dissolution of an LLC is Not Easy. This Blog has not, however, addressed the issue in Matter of Bodenchak v. 5178 Holdings LLC.

[3] Under New York law, “individual beneficiaries . . . ha[ve] no independent right to maintain an independent cause of action for the recovery of estate property, as such a right belong[s] to the personal representative of the decedent’s estate.” See Stallsworth v. Stallsworth, 138 A.D.3d 1102, 1103 (2d Dept. 2016) (citations omitted).

[4] Slip Op. at *1.

[5] LLCL § 608.

[6] Under New York law, the death of a member of a limited liability company does not trigger dissolution of that limited liability company. See LLCL § 701(b).

[7] Crabapple Corp. v. Elberg, 53 A.D.3d 434 (1st Dept. 2017); In Matter of Andris v. 1387 Forest Realty, LLC, 213 A.D.3d 923 (2d Dept 2023); see also Pachter v. Winiarski, 2021 WL 1794565 (Sup. Ct., Kings County May 5, 2021); Estate of Judith Lindenberg v. Winiarsky; 2021 WL 1794560 (Sup. Ct., Kings County May 5, 2021).

[8] Slip Op. at *1 (citing Crabapple, 53 A.D.3d at 435).

[9] Id. (citing Matter of Andris, 213 A.D.3d at 924).

[10] Id.

Tagged with: Judicial Dissolution, Limited Liability Company, Limited Liability Company Law, Substitution