Capital Call Defaults

New York Real Estate Journal recently published an article authored by Olshan Real Estate Law Of Counsel Thomas Kearns entitled “Capital Call Defaults.” In the article, Tom examines a recent New York appeals court decision (DTI-DSIC, LLC v. 930-DSIC, LLC) interpreting Delaware law that gives transactional lawyers representing the LLC’s managing member an aggressive remedy for capital contribution defaults, one of the most important issues in negotiating limited liability company agreements for real estate ventures: how to address situations in which a project requires additional capital and one or more members fail to fund a capital call. He discusses the steps taken in that matter, the court rulings on those steps and the implications for future joint ventures.