Deadlock-Breaking Mechanisms in Real Estate LLCs: Avoiding Litigation When Members and Managers Fail to Agree
Call Options, Partition, Sale, Arbitration, Mediation, and Dissolution
About the Course
Introduction
This CLE course will provide real estate counsel with a framework for drafting deadlock-breaking mechanisms in LLC operating agreements and potential state law consequences when these mechanisms are absent. The program will also discuss arbitration and mediation provisions as alternatives to litigation or judicial dissolution.
Description
Deadlocks typically arise when LLC members or managers fail to reach an agreement or obtain the required voter approval for a particular course of action. The failure to provide deadlock-breaking mechanisms in the operating agreement can result in significant expense, loss of time, litigation, or even dissolution. Where the LLC's purpose is investing in and operating real estate, deadlocks can cause asset deterioration or a loan default.
Counsel can employ various provisions in LLC agreements to break a deadlock, including buy-sell provisions, external or internal "tie-breakers," rotating or alternating voting procedures, put or call options, and where appropriate, provisions for partition or sale of the company or its assets. These provisions may be critical for the continued operation of the business.
Absent such provisions, LLC statutes will typically provide judicial remedies, including placing operational control in a custodian or dissolution of the entity. Operating agreements that do not offer mechanisms for breaking deadlock may nevertheless provide alternate methods of resolving disputes, such as mediation and arbitration. Counsel should understand the pros and cons of these alternatives for the LLC's members.
Listen as our authoritative panel outlines and provides drafting tips concerning various deadlock-breaking mechanisms in operating agreements. Counsel will also discuss arbitration vs. mediation, and why either option is likely preferable to litigation or judicial dissolution of the entity.
Presented By
Ms. Pishnyak is a key member of the firm’s Corporate and Business Services group, focusing her practice in the areas of mergers and acquisitions, commercial contracting, franchising, healthcare, and finance and banking. With extensive experience in corporate and transactional law, she leads mergers and acquisitions across various industries, particularly within the medical and dental sectors. Ms. Pishnyak’s proficiency extends to start-ups, restructuring, and reorganizations, representing both debtors and creditors in asset-based loan agreements and secured transactions. Additionally, she serves as general counsel to numerous businesses, advising clients on day-to-day corporate governance.
Ms. Schiffer represents various businesses and their owners in matters relating to business counseling and entity formation, purchase and sale of company stock or assets, business contracts, shareholder or membership agreements, disclosure agreements, commercial real estate, commercial property, and leasing transactions. She is also well-versed in business succession planning, estate planning, and estate administration. Ms. Schiffer’s clients range from individuals to a wide array of business entities, including restaurants, medical practices, retailers, builders, limited liability companies, and professional service providers, such as accountants and financial planners.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Tuesday, June 23, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. When deadlocks arise in LLC decision-making
II. Provisions designed to resolve deadlocks
A. Buy-sell
B. External or internal "tie-breakers"
C. "Rotating/alternating" or "casting" voting procedures
D. Put or call options
E. Partition or sale (is it a viable option with commercial property?)
III. Provisions requiring alternative dispute resolution
A. Mediation
B. Arbitration
IV. Special issues with commercial real estate: managing and leasing the asset, avoiding mortgage loan defaults
The panel will review these and other key issues:
- What are the typical triggers of a deadlock between members or managers?
- What are the key provisions that should be included in the LLC's operating agreement to resolve a deadlock?
- When is a partition or sale appropriate to resolve a deadlock?
- What are the advantages and disadvantages of arbitration and mediation, and what should the LLC provide?
Related Courses
Deadlock-Breaking Mechanisms in Real Estate LLCs: Avoiding Litigation When Members and Managers Fail to Agree
Tuesday, June 23, 2026
1:00 PM ET/10:00 AM PT
