Statutory fair value appraisal proceedings in New York come in two flavors. First, there’s the buy-out appraisal under Business Corporation Law § 1118 triggered by a minority shareholder’s petition for judicial dissolution....more
Let’s see how good you are at predicting the outcome and its rationale in a recently decided case involving the following facts:
The controller of a Delaware LLC has supermajority voting rights under the initial LLC...more
The fair value and fair market value appraisal standards applicable in contested buyout and dissenting shareholder valuations cut across state lines, which is one of the main reasons I occasionally highlight significant court...more
4/4/2022
/ Appraisal ,
Built-In Gains ,
Business Divorce ,
Buy-Out Agreements ,
Deal Price ,
Discounts ,
Fair Market Value ,
Fair Valuation ,
IA Supreme Court ,
IN Supreme Court ,
NC Supreme Court ,
NE Supreme Court
The heyday of common-law dissolution — if it ever had one — is long past, largely displaced by a statutory dissolution remedy for oppressed minority shareholders paired with an elective buy-out option for the respondent...more
It’s not unusual to find buy-out provisions in shareholder and operating agreements that commit the pricing of the buy-out to the “final and binding” determination of one or more appraisers. The same agreements also may...more
2/15/2021
/ Appraisal ,
Arbitration Agreements ,
Arbitration Awards ,
Business Divorce ,
Buy-Out Agreements ,
Closely Held Businesses ,
Contract Terms ,
Fair Market Value ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
PricewaterhouseCoopers ,
Repurchase Agreements ,
Shareholders
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 dog days of August are upon us, a perfect time as I do each year to offer vacationing readers some lighter fare consisting of summaries of a few recent decisions of interest involving disputes between business co-owners....more
8/13/2018
/ Appraisal ,
Business Divorce ,
Business Litigation ,
Business Valuations ,
Buy-Out Agreements ,
Co-Ownership ,
Contract Disputes ,
Contract Terms ,
Judicial Dissolution ,
Jurisdiction ,
NE Supreme Court ,
Partnership Agreements ,
Partnership Interests ,
Partnerships ,
Profit Sharing ,
Shareholders
When three gentlemen in their mid-eighties, one of whom is in a nursing home with failing health and onset dementia, are the key players in a disputed shareholder buy-out transaction, what are the odds they’ll all be around...more
7/16/2018
/ Appeals ,
Breach of Duty ,
Business Divorce ,
Buy-Out Agreements ,
Fair Market Value ,
Fiduciary Duty ,
Fraudulent Concealment ,
Motion for Reconsideration ,
Motion to Dismiss ,
Partnership Interests ,
Partnerships ,
Real Estate Investments ,
Shareholder Litigation ,
Shareholders ,
Stock Sale Agreements ,
Stock Transfer ,
Summary Judgment
Article 11 of the Business Corporation Law features multiple provisions giving judges broad authority and discretion to impose interim remedies designed to preserve corporate assets and otherwise to protect the petitioning...more
Regular readers of this blog know it’s been anything but summer doldrums in the world of business divorce, what with case law developments such as the Appellate Division’s potentially far-reaching ruling on the purposeless...more
During her many years as Presiding Justice of the Brooklyn Commercial Division, New York Supreme Court Justice Carolyn E. Demarest (Ret.) decided some of the most important and challenging business divorce matters including...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
Whenever I contemplate New York’s unusual case law on the discount for lack of marketability (DLOM) in statutory fair value buy-out proceedings, I cast my eyes westward, to the far banks of the Hudson River, and take comfort...more
Mediation has grown in popularity as a means of resolving legal disputes in lockstep with the rising costs and delays attendant to litigation and arbitration, including business divorce cases. This episode features an...more
Mediation continues to grow in popularity as a means of resolving legal disputes in lockstep with the rising costs and delays attendant to litigation and arbitration. Mediation allows the parties to air their grievances...more
As promised in the postscript to last week’s post about the appellate ruling in the Gould case, affirming Justice Platkin’s order granting the oppressed minority shareholder’s dissolution petition involving a pair...more
Does a shareholder have a fiduciary duty not to exercise a contractual right under the shareholders’ agreement to resign and demand a buy-out of his shares by the financially distressed corporation, particularly when the...more