§ 411 — Interested managers

§ 411. Interested managers. (a) No contract or other transaction\nbetween a limited liability company and one or more of its managers, or\nbetween a limited liability company and any other limited liability\ncompany or other business entity in which one or more of its managers\nare managers, directors or officers, or have a substantial financial\ninterest, shall be either void or voidable for this reason alone or by\nreason alone that such manager or managers are present at the meeting of\nthe managers, or of a class thereof, which approves such contract or\ntransaction, or that his or her or their votes are counted for such\npurpose:\n (1) if the material facts as to such manager's interest in such\ncontract or transaction and as to any such common managership,\ndirectorship, officership or financial interest are disclosed in good\nfaith or known to the other managers or class of managers, and the\nmanagers or such class approve such contract or transaction by a vote\nsufficient for such purpose without counting the vote of such interested\nmanager or, if the votes of the disinterested managers are insufficient\nto constitute an act of the managers pursuant to section four hundred\neight of this article, by unanimous vote of the disinterested managers;\nor\n (2) if the material facts as to such manager's interest in such\ncontract or transaction and as to any such common managership,\ndirectorship, officership or financial interest are disclosed in good\nfaith or known to the members entitled to vote thereon, and such\ncontract or transaction is approved by vote of such members.\n (b) If such good faith disclosure of the material facts as to the\nmanager's interest in the contract or transaction and as to any such\ncommon managership, directorship, officership or financial interest is\nmade to the managers or members, or known to the managers or class of\nmanagers or members approving such contract or transaction, as provided\nin subdivision (a) of this section, the contract or transaction may not\nbe avoided by the limited liability company for the reasons set forth in\nsubdivision (a) of this section. If there was no such disclosure or\nknowledge, or if the vote of such interested manager was necessary for\nthe approval of such contract or transaction at a meeting of the\nmanagers or class of managers at which it was approved, the limited\nliability company may avoid the contract or transaction unless the party\nor parties thereto shall establish affirmatively that the contract or\ntransaction was fair and reasonable as to the limited liability company\nat the time it was approved by the managers, a class of managers or the\nmembers.\n (c) Common or interested managers may be counted in determining the\npresence of a quorum at a meeting of the managers or of a class of\nmanagers that approves such contract or transaction.\n (d) The operating agreement may contain additional restrictions on\ncontracts or transactions between a limited liability company and its\nmanagers and may provide that contracts or transactions in violation of\nsuch restrictions shall be void or voidable by the limited liability\ncompany.\n (e) Unless otherwise provided in the operating agreement, the managers\nshall have authority to fix the compensation of managers for services in\nany capacity.\n