In Re: 720 Livonia Developments LLC, 24-1322

Chaim Landau, through Meluchim Holdings LLC (his solely-owned entity), invested $500,000 in a joint venture with Chaskiel Strulovitch to purchase property at 720 Livonia Ave, Brooklyn, NY.
The partnership agreement recognized Landau's $500,000 investment and Strulovitch's $950,000 contribution, outlining proceeds allocation.
Strulovitch allegedly breached the agreement by placing the property title in companies he alone controlled (720 Livonia Development LLC and MG Livonia LLC), leading Landau to sue in state court.
The state court ruled against Landau, finding he failed to prove his partnership interest or unjust enrichment, and dismissed his claims on the merits.
Meluchim later filed an involuntary bankruptcy petition, asserting a claim for $728,452.02 against 720 Livonia Development LLC, which the bankruptcy court disallowed based on claim preclusion from the prior state court decision.
Both the bankruptcy and district courts found Meluchim and Landau in privity for preclusion purposes, and the Second Circuit affirmed.

Issue	Plaintiff’s Argument	Defendant’s Argument	Held
Whether claim preclusion bars Meluchim’s proof of claim, despite Meluchim not being a party to the state suit	Meluchim argues it was not a party to the state case and thus shouldn't be bound by that judgment	Operations LLC argues Landau and Meluchim are in privity (sole owner and entity) and state case resolved same claim	Claim preclusion applies; Meluchim is bound as Landau’s privy
Whether interests of Meluchim and Landau are sufficiently aligned for privity	Landau contends his state court claims were personal and did not represent Meluchim’s interests	Operations LLC asserts Landau’s interests and actions in state court squarely implicated Meluchim’s rights	Interests were identical; privity exists
Whether the state court limited Landau’s ability to pursue claims in the prior action	Landau alleges the state court did not allow full development of his claims	Operations LLC claims that any issues with the state court process should have been appealed in state court	Challenges must be raised on direct appeal, not in collateral attack
Whether the merits of the $728,452.02 claim needed review by appellate court	Meluchim argues the merits deserved independent consideration	Operations LLC asserts claim preclusion & privity resolved the dispute	No need to reach merits due to preclusion

Matter of Shea, 309 N.Y. 605 (N.Y. 1956) (identity of interests and privity between a sole shareholder and entity can warrant preclusion)
Ferris v. Cuevas, 118 F.3d 122 (2d Cir. 1997) (defining privity for preclusion under New York law)
Giannone v. York Tape & Label, Inc., 548 F.3d 191 (2d Cir. 2008) (claim preclusion bars claims that were or could have been raised)
Watts v. Swiss Bank Corp., 27 N.Y.2d 270 (N.Y. 1970) (privity based on shared interest in property)
Super Nova 330 LLC v. Gazes, 693 F.3d 138 (2d Cir. 2012) (standard of appellate review in bankruptcy appeals)