In my business divorce practice I deal with many closely held corporations that have only a few or perhaps just two shareholders, each of whom is actively involved in running the business. Within that category are many...more
Some years are easier than others to select the most significant business divorce cases. In this, the 16th year I’ve published this top-10 list, the task is made especially difficult by a veritable flood of court decisions...more
12/27/2023
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Business Ownership ,
Fiduciary Duty ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Shareholders
Earlier this year, using as a springboard the Maryland intermediate appellate court’s decision in Eastland Food Corp. v Mekhaya, I posted about a topic on which there’s little or no New York law, viz., whether a complaint for...more
In the menagerie of closely held companies, those owned and controlled by 50/50 business partners pose unique benefits and challenges.
On the benefit side, co-equal ownership and control can foster cooperation,...more
Notwithstanding that the pictured snow globe is the only snow I’ve seen in my neck of the woods this balmy winter, I’m pleased to present my annual Winter Case Notes collection of recent court decisions of interest....more
Those of us who follow the Delaware Chancery Court’s output are regularly treated to lengthy, detailed, finely crafted opinions sometimes in excess of 100 pages. Opinions of that length from our New York state court judges...more
7/18/2022
/ Bad Faith ,
Breach of Duty ,
Business Divorce ,
Business Litigation ,
Capital Calls ,
Co-Ownership ,
Contract Disputes ,
Contract Terms ,
Covenant of Good Faith and Fair Dealing ,
Financing ,
Joint Venture ,
Motion to Dismiss ,
Passive Investments
The pictured architectural rendering of the sunlit Kings County Supreme Courthouse at 360 Adams Street, completed in 1957, doesn’t quite capture the reality of its dour, hulking presence in downtown Brooklyn. Its design...more
7/5/2022
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Corporate Waste ,
Derivative Suit ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Misappropriation ,
Ownership Interest ,
Shareholders ,
Standing
Disputes over capital accounts and equity percentages are frequent fodder for business divorce litigation — especially in LLCs without operating agreements. Exemplars previously treated on this blog include Chiu v Chiu, an...more
6/6/2022
/ Aiding and Abetting ,
Breach of Duty ,
Business Divorce ,
Business Litigation ,
Capital Contributions ,
Equity ,
Fiduciary Duty ,
Fraud ,
Limited Liability Company (LLC) ,
Loans ,
Negligent Misrepresentation
It’s been another year of important case law developments in business divorce controversies. I’m pleased to present my 14th annual list of the past year’s ten most significant cases....more
Appearances can be deceiving. -
That, essentially, was the argument made in two recently decided cases involving claims for judicial dissolution. ...more
11/15/2021
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Contract Terms ,
Employment Contract ,
Fraudulent Conveyance ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Purchase Price ,
Stock Transfer ,
Unjust Enrichment
The New York Court of Appeals’ 2012 opinion in Pappas v Tzolis, decided in the wake and spirit of that court’s rulings the year before in the Centro Empresarial v America Movil and Arfa v Zamir cases, raised the bar for...more
Of late I’ve been ruminating on New York’s membership in the shrinking pool of states that don’t recognize oppression of an LLC minority member by the controlling members or managers as ground for judicial dissolution....more
4/19/2021
/ Books & Records ,
Breach of Duty ,
Business Divorce ,
Business Litigation ,
Closely Held Businesses ,
Contract Terms ,
Dissolution ,
Fiduciary Duty ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Minority Shareholders ,
Operating Agreements ,
Shareholder Distributions ,
Shareholder Oppression
Here in the New York metro area, for the first time in years winter is living up to its name. The snow-plowed streets and sub-freezing temperatures are a natural setting for this sixth annual edition of Winter Case Notes in...more
2/22/2021
/ Breach of Duty ,
Business Divorce ,
Business Litigation ,
Commercial Court ,
Corporate Deadlock ,
Corporate Dissolution ,
Fiduciary Duty ,
Law Firm Partners ,
Limited Liability Company (LLC) ,
Tax Exempt Entities ,
Tax Fraud
Three weeks ago, I wrote about the Bak v Rostek case in Brooklyn Supreme Court addressing the duty to disclose third-party offers amidst buy-out negotiations between co-owners. ...more
2/1/2021
/ Aiding and Abetting ,
Breach of Duty ,
Business Divorce ,
Business Litigation ,
Buy-Out Agreements ,
Corporate Sales Transactions ,
Duty to Disclose ,
Fiduciary Duty ,
Fraudulent Inducement ,
Limited Liability Company (LLC) ,
Purchase Agreement ,
Unjust Enrichment
In 2011 and 2012, the New York Court of Appeals decided a series of difficult cases addressing the circumstances under which a contractual waiver or release included in a buyout or other agreement between co-owners of closely...more
The COVID-19 pandemic kept New York’s courthouses dark the last few months, but it didn’t slow down the output of decisions by Commercial Division judges. If anything, the pause of new case filings and non-emergency motions...more
If you read most any operating agreement for a manager-managed LLC, chances are you’ll find somewhere in it a grant of decision-making authority in the manager’s “sole and absolute discretion” or verbiage to similar effect....more
The Comic Strip is the oldest stand-up comedy showcase club in New York City. Its co-founders Robert Wachs and Richard Tienken opened the club in 1975 on Manhattan’s Upper East Side....more
I’ve yet to see him make a court appearance, and hope I never do, but the Grim Reaper sure has a knack for disrupting business divorce litigation involving LLCs and limited partnerships....more
2/10/2020
/ Assignments ,
Automatic Stay ,
Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Commercial Court ,
Controlling Person ,
Decedent Protection ,
Derivative Suit ,
Dissolution ,
Family Businesses ,
Fiduciary Duty ,
Fraud ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Ownership Interest ,
Partnership Interests ,
Partnerships ,
Real Estate Market ,
Statutory Interpretation ,
Transfer of Control ,
Unfair Dealing
Not for the first time, I find myself intrigued by the federal courts’ resistance to hearing state law claims for judicial dissolution of business entities where subject matter jurisdiction otherwise exists based on diversity...more
1/13/2020
/ Breach of Duty ,
Business Divorce ,
Business Entities ,
Business Litigation ,
Commercial Court ,
Commercial Leases ,
Common Law Claims ,
Contract Renewal ,
Damages ,
Derivative Suit ,
Dissolution ,
Fiduciary Duty ,
First Impression ,
Holding Companies ,
Investment ,
Judicial Dissolution ,
Nonprofits ,
Shareholder Litigation ,
Shareholder Rights ,
Shareholders ,
State Law Claims ,
Statutory Interpretation ,
Statutory Violations ,
Subject Matter Jurisdiction ,
Unjust Enrichment
In the end, it wasn’t much of a fight.
The case of Huggins v Scott, decided last month by Justice W. Franc Perry of the Manhattan Supreme Court, illustrates anew the well-nigh insurmountable hurdle faced by a minority...more
12/9/2019
/ Books & Records ,
Breach of Duty ,
Business Divorce ,
Business Litigation ,
Contract Disputes ,
Fiduciary Duty ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Receivership
The title of this post describes not an army maneuver, but the outcome of a recent lawsuit in Delaware Chancery Court for advancement of litigation expenses in which...more
11/4/2019
/ Advancement ,
Amended Complaints ,
Breach of Duty ,
Business Divorce ,
Confidential Information ,
Contract Terms ,
Delaware General Corporation Law ,
Employment Contract ,
Fiduciary Duty ,
Hiring & Firing ,
Indemnity ,
Insider Trading ,
Litigation Fees & Costs ,
Merger Agreements ,
Non-Compete Agreements ,
Non-Solicitation Agreements ,
Post-Termination Acts ,
Pre-Termination Notice ,
Statutory Interpretation
It’s that time of year again, when I offer some lighter fare for poolside consumption consisting of summaries of a few recent decisions of interest involving disputes between business co-owners....more
8/12/2019
/ Breach of Duty ,
Business Divorce ,
Buyouts ,
Contract Terms ,
Dissolution ,
Fiduciary Duty ,
Legal Representatives ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Minority Shareholders ,
Non-Reliance Clauses ,
Pass-Through Entities ,
Settlement Agreements ,
Shareholder Litigation ,
Shareholder Oppression
As it approaches its sixth anniversary with little sign of letting up, the highly contentious litigation between brothers and business partners NIssim and Avraham Kassab is the gift that keeps on giving, at least to us...more
The litigation arsenal of business divorce lawyers contains weapons of varying firepower. The choice of weapon for any particular assignment will depend on many factors including the type and size of the business; whether the...more