If Sisyphus were a judge, he’d be assigned the Fuks case. Fuks began on December 26, 1996. Fire up your mental time machine, travel back in time, and picture what was going on in your life those many years ago....more
Closely-held business entities come in all shapes and sizes. By definition, under Partnership Law § 10, it takes “two or more” owners to form a general partnership. But corporations and LLCs have no such impediment, ranging...more
5/17/2024
/ Board Members ,
Breach of Duty ,
Business Entities ,
Business Litigation ,
Business Ownership ,
Corporate Governance ,
Derivative Suit ,
Dispute Resolution ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Partnerships ,
Shareholders
Parallel business divorce proceedings in the same or different courts alleging overlapping or duplicative claims are common.
When it occurs, judges must often determine whether to dispose of one so the other may proceed...more
1/8/2024
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Conversion ,
Corporate Waste ,
CPLR ,
Divorce ,
Fiduciary Duty ,
Gross Negligence ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
NY Supreme Court ,
Property Ownership
Misappropriation of corporate opportunity is one of our favorite, most frequently blogged topics on New York Business Divorce. A special kind of breach of fiduciary duty, the corporate opportunity doctrine holds that...more
Occasionally, we come across court cases in which the majority owners so egregiously mistreated their minority co-owners that it’s difficult not to write about it — if only as a lesson in what not to do to separate oneself as...more
Do New York’s Surrogate’s Courts have jurisdiction to compel an accounting related to a non-party limited liability company in which the decedent’s estate has only a minority interest?
...more
8/28/2023
/ Article III ,
Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Closely Held Businesses ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Standing ,
Surrogate's Court ,
Trust Accounting
No corporate lawyer wants to get drawn into a nasty litigation between an entity’s owners. But the reality is that corporate and general counsel often find themselves unwittingly ensnared in business divorce cases. Sometimes...more
Litigants assert with growing frequency “faithless servant” claims in business divorce cases. New York’s faithless servant doctrine, and the legal standards governing faithless servant claims, emanate from two ancient...more
The legal concept of “conflicts of laws” is difficult, to say the least, confounding even seasoned litigators and judges, with bulky treatises and entire law school classes devoted to the subject....more
9/12/2022
/ Breach of Contract ,
Breach of Duty ,
Business Divorce ,
Business Litigation ,
Choice-of-Law ,
Constructive Trusts ,
Conversion ,
Delaware General Corporation Law ,
Internal Affairs Doctrine ,
Misappropriation ,
Unjust Enrichment
You know you’re in big trouble if the post-trial decision in a lawsuit you filed begins like this:
“The court finds the plaintiff, Rowen Seibel, not credible. This is primarily because it appears he fabricated evidence...more
A number of lawsuits have percolated through New York’s courts over the past five years between Adam Max, son of world-renowned visual artist Peter Max, and Adam’s sister, Libra, over control and management of the family...more
5/23/2022
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Judgment Rule ,
Derivative Suit ,
Exculpatory Clauses ,
Family Businesses ,
Fiduciary Duty ,
Fine Art ,
Hostile Takeover ,
Negligence ,
Personal Liability
Two years ago, Peter Mahler wrote about a dissolution lawsuit by a female minority shareholder alleging that her male co-shareholders condoned a pattern of sexually offensive and demeaning conduct by a senior co-worker, which...more
11/29/2021
/ #MeToo ,
Breach of Duty ,
Business Divorce ,
Business Judgment Rule ,
Business Litigation ,
Closely Held Businesses ,
Corporate Culture ,
Corporate Waste ,
Derivative Complaint ,
Dissolution ,
Fiduciary Duty ,
Harassment ,
Sexual Harassment ,
Shareholder Oppression ,
Summary Judgment
Most folks associate beer with pleasure. Many craft brewers will tell you they went into business for that reason: to make themselves and others happy (and, oh yeah, make money). ...more
9/13/2021
/ Breach of Contract ,
Breach of Duty ,
Breweries ,
Business Divorce ,
Business Litigation ,
Dilution ,
Freeze-Out Mergers ,
Limited Liability Company (LLC) ,
Membership Interest ,
Motion To Enjoin ,
Operating Agreements ,
Preliminary Injunctions ,
Startups
Last week, Peter Mahler blogged about a recent decision holding that a minority shareholder’s claim against its majority co-owners for breach of fiduciary duty in connection with a sale of the business to a third party...more
Oral agreements to form and operate business enterprises are a recurring subject of this blog. We’ve written many times, for example, about the comparative ease vis-a-vis other kinds of entities with which one can...more
3/15/2021
/ Breach of Duty ,
Business Divorce ,
Business Formation ,
Business Litigation ,
Fiduciary Duty ,
Fraudulent Conveyance ,
Joint Venture ,
Operating Agreements ,
Oral Contracts ,
Partnership Agreements ,
Unjust Enrichment
In Jacobs v Cartalemi, now the leading case on the subject of LLC member withdrawal (which our firm had the pleasure of litigating), the Appellate Division – Second Department repeated a well-established principle of law:...more
In the famous case of Meinhard v Salmon, Justice Benjamin Cardozo wrote in lofty language that lawyers of maltreated business owners have loved to quote ever since that the duty of loyalty among closely-held business owners...more
7/7/2020
/ Appeals ,
Attorney's Fees ,
Breach of Duty ,
Calculation of Damages ,
Common Law Torts ,
Derivative Suit ,
Disgorgement ,
Duty of Loyalty ,
Fiduciary Duty ,
Legal History ,
Self-Dealing
Like business divorce, New York trusts and estates litigation (“T&E”) is a highly specialized niche of the law. T&E litigators have their own universe of substantive law, their own set of procedural rules – the Surrogate’s...more
9/3/2019
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Ownership ,
Corporate Dissolution ,
Decedent Protection ,
Derivative Suit ,
Director Removal ,
Estate Planning ,
Fiduciary Duty ,
Jurisdiction ,
Legitimate Business Interest ,
Surrogate's Court
Strict procedural rules apply to corporate dissolution proceedings in New York, a difficult truth learned the hard way by a five-time rejected, would-be dissolution petitioner in a recent decision by Bronx County Supreme...more
8/6/2019
/ Breach of Duty ,
Business Divorce ,
Conversion ,
Corporate Dissolution ,
Embezzlement ,
Fiduciary Duty ,
Fraud ,
Holding Companies ,
Motion to Dismiss ,
Motion to Show Cause ,
White Collar Crimes
How can majority business owners legally rid themselves of a problematic minority owner? Not by transferring the business’s assets to another entity for no consideration. ...more
3/19/2018
/ Breach of Duty ,
Business Litigation ,
Corporate Conversions ,
Fiduciary Duty ,
Fraudulent Conveyance ,
Freeze-Out Mergers ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Minority Shareholders ,
Summary Judgment ,
Transfer of Assets
New York’s LLC judicial dissolution statute, Section 702 of the Limited Liability Company Law, provides far more limited grounds to dissolve a business than the Business Corporation Law – a harsh reality for allegedly...more
Article 11 of the Business Corporation Law governs dissolution of closely held New York business corporations. Article 11 has existed, more or less in its current form, for decades. Some of its provisions have been heavily...more
4/17/2017
/ Breach of Contract ,
Breach of Duty ,
Buy-Out Agreements ,
Corporate Dissolution ,
Fiduciary Duty ,
Fraud ,
Minority Shareholders ,
Shareholder Litigation ,
Shareholders ,
Tortious Interference ,
Unjust Enrichment