July 23, 2026  ·  Complaint filed July 22, 2026  ·  nysd, No. 1:26-cv-06231

By David Brunk, civil litigation attorney

Read the filing

Haruvi v. Haruvi Asks Whether a 99% Economic Interest Trumps LLC Membership

Lawsuit Alleges Secret Attempt to Sell $3 Million Condo Unit

The verified complaint in Arthur Haruvi and Esther Haruvi v. Michelle Haruvi and 51D Realty LLC, filed July 22, 2026, in the United States District Court for the Southern District of New York, opens with a stark allegation: "This action arises from Defendant Michelle Haruvi's attempt to sell, without authorization and in secret, a Manhattan luxury condominium unit worth more than $3 million, and to abscond with the proceeds to the detriment of her parents, Plaintiffs" (Compl. ¶1). The lawsuit centers on a dispute over control of 51D Realty LLC, a New York limited liability company whose sole asset is a luxury condominium unit (the Unit) located at 322 West 57th Street, Apartment 51D, in The Sheffield building. The Unit was purchased by the LLC on July 18, 2012, for $2,596,538 and is now valued at approximately $3,000,000 (Compl. ¶24).

Assignment of Beneficial Interest Did Not Confer Management Rights, Plaintiffs Allege

51D Realty LLC was formed on July 3, 2012, to acquire the Unit in fee simple absolute. The LLC’s articles of organization, filed with the New York Department of State, list Arthur and Esther Haruvi as its only members. The complaint alleges that the LLC has never adopted an operating agreement, and its affairs are governed solely by its articles and the New York Limited Liability Company Law (LLCL). The complaint further asserts that the LLC’s Articles of Organization do not provide for a “Managing Member,” and Michelle’s assumption of that title is void (Compl. ¶53, ¶224).

On November 16, 2012, Arthur Haruvi executed an Assignment of a 99% beneficial economic interest in the LLC to Michelle Haruvi as a gift. The complaint alleges that this assignment did not confer membership, management rights, or voting power under state law, which limits an assignee’s rights to economic interests only. As the complaint states, “an assignment of an interest in a limited liability company does not entitle the assignee to participate in the management and affairs of the limited liability company or to become or to exercise any rights or powers of a member” (Compl. ¶151). Plaintiffs retained a 1% economic interest and exclusive authority to manage the LLC and the Unit. The complaint emphasizes that “Michelle has no authority under the Articles of Organization, the LLCL, or applicable New York law to manage the LLC, act on its behalf, or sell, transfer, convey, encumber, or otherwise dispose of the Unit” (Compl. ¶163).

The First Cause of Action seeks a declaratory judgment under FRCP 57 and CPLR 3001 to confirm the plaintiffs’ exclusive ownership, membership, and control of 51D Realty LLC, as well as the legal effect of the November 16, 2012, Assignment (Compl. ¶135-151). The Second Cause of Action seeks a declaratory judgment that Michelle Haruvi, as the assignee of a beneficial economic interest only, lacks authority to sell, transfer, or dispose of the Unit under N.Y. Ltd. Liab. Co. Law §§ 603 and 604 (Compl. ¶152-167). The Fourth Cause of Action seeks a declaratory judgment voiding Michelle’s title and authority as “Managing Member” under N.Y. Ltd. Liab. Co. Law §§ 401 and 414, as well as her removal as manager pursuant to LLCL § 414 (Compl. ¶219-234). The Fifth Cause of Action seeks an order compelling Michelle Haruvi and 51D Realty LLC to permit inspection of the LLC’s books and records pursuant to N.Y. Ltd. Liab. Co. Law § 1102 (Compl. ¶235-246). The Sixth Cause of Action seeks an equitable accounting of Michelle’s stewardship of LLC funds under New York common law (Compl. ¶247-260). The Seventh Cause of Action alleges that Michelle Haruvi failed to make distributions to the plaintiffs in accordance with their proportionate share of the LLC’s profits, in violation of N.Y. Ltd. Liab. Co. Law §§ 503 and 504 (Compl. ¶261-270).

Michelle Haruvi Allegedly Usurped Control of LLC and Diverted Rental Income

The complaint alleges that beginning in August 2021, Michelle Haruvi took a series of actions to usurp control of 51D Realty LLC. According to the filing, she transferred the LLC’s bank and capital accounts to her sole control, falsely claimed 99% ownership of the LLC to The Sheffield’s managing agent in September 2021, and opened JPMorgan Chase accounts for the LLC in her name with zero balances in late October 2021 (Compl. ¶86, ¶87, ¶88). The complaint further alleges that Michelle ceased providing plaintiffs with financial information, tax documents, or distributions, effectively depriving them of their management authority. The complaint states that Michelle “has taken the LLC's bank accounts under her exclusive control ... diverted the LLC's rental income to accounts in her own name in California” (Compl. ¶206).

The Unit was leased to tenants from 2013 to June 2023, generating substantial rental income. From 2013 to 2015, the Unit was leased to Joshua Eisen at $9,200 per month. From 2015 to mid-2016, it was leased to Christine Osekoski at $9,500 per month. From mid-2016 to June 2023, the Unit was leased to Cynthia Selfridge at $9,300 per month ($111,600 per year) (Compl. ¶94(a)-(c)). The complaint alleges that Michelle diverted this income, along with rental payments from prior tenants, to herself without apportioning any portion to plaintiffs, in violation of LLCL §§ 503 and 504, which govern distributions to members. The complaint estimates that the Unit currently generates more than $100,000 per year in rental income (Compl. ¶96).

On February 26, 2026, Michelle was deposed in a separate legal proceeding, Simry Realty Corp. v. Haruvi, where she allegedly concealed the LLC’s existence and its rental income during sworn testimony. The complaint alleges that she omitted the LLC from her financial disclosures despite claiming 99% ownership and testified that she had no other sources of income (Compl. ¶104, ¶109). Plaintiffs are represented in this action by Holland & Knight LLP, while Michelle Haruvi is represented by K&L Gates LLP in her ongoing litigation against the plaintiffs.

Attempted Sale of Unit Allegedly Violates State Law and Building By-Laws

On June 8, 2026, plaintiffs learned that Michelle was actively marketing the Unit for sale after receiving a building-wide notice from The Sheffield. The notice, which was also received by the plaintiffs’ other daughter, Aileen Haruvi, alerted residents to the proposed sale (Compl. ¶18, ¶115). The complaint alleges that Michelle engaged a broker, scheduled showings, and intended to sell the Unit for approximately $3,000,000 to fund her ongoing litigation against plaintiffs (Compl. ¶128). The complaint asserts that Michelle’s motivation for selling the Unit is part of a broader effort to weaponize family assets for personal gain (Compl. ¶83).

The complaint asserts that Michelle lacks authority to sell the Unit under LLCL § 402(d)(2), which requires the vote of at least a majority in interest of the members to approve the sale of all or substantially all of an LLC’s assets. As the complaint states, “the vote of at least a majority in interest of the members entitled to vote thereon shall be required to approve the sale, exchange, lease, mortgage, pledge or other transfer of all or substantially all of the assets of the limited liability company” (Compl. ¶179). Plaintiffs, as the LLC’s only members, have not consented to the sale and affirmatively withhold their consent, as stated in the complaint: “Plaintiffs ... hereby affirmatively withhold their consent to any sale, transfer, or encumbrance of the Unit” (Compl. ¶183).

The complaint further alleges that Michelle’s attempted sale violates the building’s By-Laws, which require notice to the Residential Board and a right of first refusal for any sale of a unit. Article 8, Section 8.1 of The Sheffield’s By-Laws mandates that unit owners provide notice of a proposed sale, and any sale violating these provisions is voidable at the Board’s election under Section 8.9 (Compl. ¶129, ¶133). The Sheffield imposed a 24% aggregate increase in common charges on December 12, 2025, comprising an 8.17% common charge increase and a 15% temporary capital assessment to fund approximately $5.6 million in capital expenditures for the building.

Plaintiffs seek a judgment declaring that they are the only members of 51D Realty LLC with exclusive authority to manage the LLC and the Unit, and that Michelle’s assignment confers only a beneficial economic interest. They also request an order compelling Michelle to account for the LLC’s books, records, and wrongfully diverted funds, as well as the imposition of a constructive trust on the Unit and any proceeds of its sale. The complaint also seeks injunctive relief to halt the threatened sale of the Unit and the appointment of a receiver during the pendency of the action (Compl. ¶¶215-218). The Tenth Cause of Action alleges a breach of fiduciary duty against Michelle Haruvi under N.Y. Ltd. Liab. Co. Law § 409 and common law (Compl. ¶296-306).

The complaint seeks the appointment of a temporary receiver to preserve the LLC’s assets pending litigation. The filing states that a receiver is necessary to preserve the LLC’s sole asset and its income for the benefit of whichever members are ultimately determined to be entitled to them. As the complaint asserts, “A receiver would preserve the LLC’s sole asset and its income for the benefit of whichever members are ultimately determined to be entitled to them…” (Compl. ¶216). The proposed receiver would have authority to take possession of the Unit, LLC bank accounts, books, and records; collect and preserve rental income; pay carrying costs; and prevent the dissipation of assets. The complaint alleges that Michelle claims to be the “Managing Member,” with authority to manage the LLC and to act unilaterally on its behalf, including to sell its sole asset (Compl. ¶221).

Fourth Cause of Action Seeks Removal of Michelle as Manager Under LLCL § 414

The complaint’s Fourth Cause of Action seeks a declaratory judgment voiding Michelle’s authority as “Managing Member” and, in the alternative, her removal as manager pursuant to N.Y. Ltd. Liab. Co. Law § 414. The complaint alleges that the LLC’s Articles of Organization do not provide for a “Managing Member,” and Michelle’s assumption of that title and exercise of management authority are void (Compl. ¶224, ¶225). The complaint further asserts that plaintiffs, as the LLC’s only members, hold a majority in interest and are entitled to vote to remove Michelle as manager. The complaint cites ample cause for removal, including her unauthorized attempt to sell the Unit, seizure of the LLC’s bank accounts, diversion of funds to herself, and refusal to provide an accounting of the LLC’s finances. As the complaint states, “her attempt to sell the LLC’s sole asset without authority and without notice to or consent of the other members…” constitutes ample cause for removal (Compl. ¶232). The complaint also alleges that Michelle’s conduct includes concealing the LLC’s existence and rental income during her February 26, 2026, deposition in the Simry Action (Compl. ¶301(e)).

Additional Causes of Action Seek Accounting, Inspection of Books, and Distributions

The complaint includes additional causes of action seeking an equitable accounting of Michelle’s stewardship of LLC funds, inspection of the LLC’s books and records, and distributions to plaintiffs. The Fifth Cause of Action seeks an order compelling Michelle and the LLC to produce all books and records, including financial statements, bank records, tax returns, and contracts, pursuant to LLCL § 1102. The complaint requests that Michelle and the LLC be ordered to produce “all federal, state, and local tax returns and all other tax documents… for the most recent fiscal years…” (Compl. ¶245). The Sixth Cause of Action seeks a full accounting of the LLC’s funds, spanning five years of rental income, expenses, capital-account activity, and distributions, as well as a surcharge for any improperly taken sums. The complaint states that the court should issue a judgment “directing Michelle to render and file a full, complete, and verified account of her administration of the LLC’s money and property…” (Compl. ¶259). The Seventh Cause of Action alleges that Michelle failed to make distributions to plaintiffs in accordance with their proportionate share of the LLC’s profits, as required by LLCL §§ 503 and 504 (Compl. ¶¶261-270).

The complaint alleges that Michelle distributed substantial sums to herself while distributing nothing to plaintiffs, depriving them of their rightful share of the LLC’s income (Compl. ¶268). The complaint further alleges that Michelle’s conduct constitutes conversion, as she exercised unauthorized dominion over the LLC’s identifiable funds, including rental income and bank accounts (Compl. ¶272). The complaint defines conversion as “the unauthorized assumption and exercise of the right of ownership over identifiable property belonging to another” (Compl. ¶272). The Eighth Cause of Action asserts a claim for conversion against Michelle Haruvi under New York common law (Compl. ¶271-276). The complaint alleges that in or around 2021, Michelle seized control of the LLC’s bank accounts and redirected rental income to herself, and in or around August 2021, she assumed exclusive control over the LLC and held herself out as “Managing Member” (Compl. ¶277, ¶297).

The Ninth Cause of Action alleges that Michelle has been unjustly enriched at the plaintiffs’ expense by seizing control of the LLC’s assets and diverting its income. The complaint states that “Unjust enrichment requires that (a) the defendant was enriched, (b) at the plaintiff’s expense, and (c) equity and good conscience militate against permitting the defendant to retain what the plaintiff seeks to recover” (Compl. ¶285). The complaint asserts that Michelle’s enrichment derived from LLC property, obtained by seizing the LLC’s accounts and excluding plaintiffs from their rightful share of distributions (Compl. ¶291). The complaint alleges that Michelle’s control over the LLC’s sole asset, valued at approximately $3,000,000, risks unjust enrichment of the plaintiffs’ proportionate share (Compl. ¶310-311).

Breach of Fiduciary Duty Alleged for Attempted Sale and Diversion of Funds

The Tenth Cause of Action alleges that Michelle breached her fiduciary duties to the plaintiffs under N.Y. Ltd. Liab. Co. Law § 409 and common law. The complaint states that “a manager is required to perform his or her duties in good faith and with that degree of care that an ordinarily prudent person in a like position would use” (Compl. ¶298). The complaint further alleges that Michelle’s conduct constitutes a breach of her fiduciary duties by attempting to sell the Unit without member consent, seizing control of the LLC’s bank accounts, diverting rental income to herself, withholding financial records, and concealing the LLC’s existence during sworn testimony. The complaint asserts that “Michelle’s conduct is not subject to exculpation, because it was undertaken in bad faith, involved intentional misconduct or a knowing violation of law” (Compl. ¶303). The Eleventh Cause of Action seeks the imposition of a constructive trust on the Unit and any proceeds of its sale under New York common law (Compl. ¶307-316).

The complaint alleges that Michelle’s attempt to sell the Unit and divert its proceeds would cause irreparable harm to plaintiffs, as the Unit is unique real property and its sale would place the proceeds beyond the reach of the court. The complaint states that “equity and good conscience require that Michelle not be permitted to retain, or to place beyond the reach of Plaintiffs and this Court, the LLC’s sole asset” (Compl. ¶312).

Plaintiffs seek a judgment declaring Michelle’s authority as a manager void, or, in the alternative, removing her as manager under LLCL § 414. They also seek the imposition of a constructive trust on the Unit and any proceeds of its sale, as well as damages for breach of fiduciary duty, conversion, and unjust enrichment. The allegations in the complaint are unproven, and no defendant has yet responded to the claims.

The allegations described here are taken from the filing and remain unproven; no responsive pleading is reflected in the source document.

David Brunk is a civil litigation attorney. He can be reached at david@newmanbrunk.com.