N.Y. Limited Liability Company Law § 411: Interested managers

§ 411. Interested managers. (a) No contract or other transaction

between a limited liability company and one or more of its managers, or

between a limited liability company and any other limited liability

company or other business entity in which one or more of its managers

are managers, directors or officers, or have a substantial financial

interest, shall be either void or voidable for this reason alone or by

reason alone that such manager or managers are present at the meeting of

the managers, or of a class thereof, which approves such contract or

transaction, or that his or her or their votes are counted for such

purpose:

(1) if the material facts as to such manager's interest in such

contract or transaction and as to any such common managership,

directorship, officership or financial interest are disclosed in good

faith or known to the other managers or class of managers, and the

managers or such class approve such contract or transaction by a vote

sufficient for such purpose without counting the vote of such interested

manager or, if the votes of the disinterested managers are insufficient

to constitute an act of the managers pursuant to section four hundred

eight of this article, by unanimous vote of the disinterested managers;

or

(2) if the material facts as to such manager's interest in such

contract or transaction and as to any such common managership,

directorship, officership or financial interest are disclosed in good

faith or known to the members entitled to vote thereon, and such

contract or transaction is approved by vote of such members.

(b) If such good faith disclosure of the material facts as to the

manager's interest in the contract or transaction and as to any such

common managership, directorship, officership or financial interest is

made to the managers or members, or known to the managers or class of

managers or members approving such contract or transaction, as provided

in subdivision (a) of this section, the contract or transaction may not

be avoided by the limited liability company for the reasons set forth in

subdivision (a) of this section. If there was no such disclosure or

knowledge, or if the vote of such interested manager was necessary for

the approval of such contract or transaction at a meeting of the

managers or class of managers at which it was approved, the limited

liability company may avoid the contract or transaction unless the party

or parties thereto shall establish affirmatively that the contract or

transaction was fair and reasonable as to the limited liability company

at the time it was approved by the managers, a class of managers or the

members.

(c) Common or interested managers may be counted in determining the

presence of a quorum at a meeting of the managers or of a class of

managers that approves such contract or transaction.

(d) The operating agreement may contain additional restrictions on

contracts or transactions between a limited liability company and its

managers and may provide that contracts or transactions in violation of

such restrictions shall be void or voidable by the limited liability

company.

(e) Unless otherwise provided in the operating agreement, the managers

shall have authority to fix the compensation of managers for services in

any capacity.