ALI-ABA Course of Study Modern Real Estate Transactions July 25 ...

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2238 (b) (c) Found to be a Breach of a Non-assignment Clause. At least one case holds that mere dissolution breaches a "nonassignment by operation of law" clause regardless of the treatment of the lease on dissolution. See Messall v. Merlands Club, Inc., 244 Md. 18, 222 A.2d 627 (1966) (holding that forfeiture of corporate charter violated lease provision prohibiting devolution of the lease by operation of law). Post Dissolution Defaults. Even if the dissolution does not violate a non-assignment clause, the clause may be violated by subsequent reincorporation or transfer of the lease following dissolution. See 1 MILTON R. FRIEDMAN, FRIEDMAN ON LEASES § 7.303c2 (4th ed. 1997 & Supp. 2002). v. Liquidation. 4. Fiduciaries. 5. Retransfer to Original Tenant. 49 AM. JUR. 2d Landlord and Tenant § 1092 (1995 & Supp. 2002). 6. Application to Modern Entity Vehicles Such as LLCs & LLPs. i. Uniform Acts: (a) The draft Uniform Limited Liability Partnership Act (1996) states that when a partnership converts to a limited liability partnership (and vice versa), the converted entity is the same entity that existed before the conversion for all purposes. See Unif. Ltd. Liability P’ship Act draft § 904 (1996). (b) The Uniform Limited Liability Company Act also states that a partnership or limited partnership that has been converted into a limited liability company is for all purposes the same entity that existed before the conversion. All property owned by the converting entity vests in the limited liability company. See Unif. Ltd. Liablity Co. Act § 903 (1996). The comment to section 903 states that a conversion is not a conveyance or transfer and that title to all property vests in the LLC as a matter of law without reversion or impairment. See id. cmt. ii. Cases and Commentary. There have been very few cases or articles dealing with the effect of a conversion of a partnership to a LLC and a LLP. See generally Elizabeth S. Miller, The Advent of QBMKE\5419766.5 12
2239 LLCs and LLPs in the Case Law: A Survey of Cases Dealing with Registered Limited Liability Partnerships and Limited Liability Companies, VPC0312 ALI-ABA 11 (2002). Some have opined that it would be logical for consents not to be required since the debts and liabilities of the converted entity remain the same. See James E. Abbott and Raymond R. Ferrell, Mergers, Consolidations and Conversions under the New York Limited Liability Company Law, in Karon S. Walker, NEW YORK LIMITED LIABILITY PARTNERSHIPS: A GUIDE TO LAW AND PRACTICE ch. 11 (New York Practice Series 2002). Some courts have interpreted their state equivalent of the U.L.L.C.A. conversion provision as mandating that a conversion would transfer the pre-converted entity’s interests to the converted entity by “operation of law.” See C&J Builders and Remodelers, LLC v. Geisenheimer, 249 Conn. 415, 733 A.2d 193 (1999) (holding that a conversion of a sole proprietorship to a limited liability company transferred all of its interest by operation of law); see also Mandell v. Comm’r of Revenue Servs., 2001 WL 1375153 (unpublished opinion) (holding that the conversion of an individual owner of commercial property to a single-member limited liability company would not require a transfer fee); but see Wolter v. Wis. Dep’t of Revenue, 231 Wis.2d 651, 605 N.W.2d 283 (1999) (holding that recording of notice of conversion of partnership to LLC, as required under the statutes, was subject to transfer tax). E. Volitional Actions or Events that Implicate Assignment or Subletting Provisions. 1. Pledge. 2. Mortgage. See 49 AM. JUR. 2d Landlord and Tenant § 1095 (1995 & Supp. 2002); Hasty Inc. v. Inwood Buckhorn Joint Venture, 908 S.W.2d 494 (Tex. Ct. App. 1995) (holding that non-assignment clause not breached by Tenant assigning lease to lender as security and bank releasing same after Landlord claimed default). 3. License. 4. Partial Transfer. 5. Appointment of a Receiver. 49 AM. JUR. 2d Landlord and Tenant § 1099 (1995 & Supp. 2002). 6. Consolidation. F. Non-Volitional Actions Implicating Assignment or Subleasing Prohibitions. 49 AM. JUR. 2d Landlord and Tenant § 1096 (1995 & Supp. 2002). QBMKE\5419766.5 13
Page 1 and 2: 2225 ALI-ABA Course of Study Modern
Page 3 and 4: 2227 ASSIGNMENT AND SUBLETTING John
Page 5 and 6: 2229 Woolworth Co., 844 F.2d 369 (6
Page 7 and 8: 2231 Assignment, 21 HASTINGS L.J. 5
Page 9 and 10: 2233 i. Creditworthiness. ii. iii.
Page 11 and 12: 2235 7.303cl (4th ed. 1997 & Supp.
Page 13: 2237 iv. Dissolution. (a) Not Consi
Page 17 and 18: 2241 B. Liabilities of Parties on A
Page 19 and 20: 2243 (1968 & Supp. 2002). Conflicti
Page 21 and 22: 2245 C. Concurrent Liability. 1. As
Page 23 and 24: 2247 VI. ADDITIONAL CONSIDERATIONS
Page 25 and 26: 2249 D. Consent of Lessor. E. Notic

ALI-ABA Course of Study Modern Real Estate Transactions July 25 ...

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