I recently had the privilege of speaking to an audience of judges of the New York Supreme Court Commercial Division at Fordham Law School’s Eileen Bransten Institute on Complex Commercial Litigation. Naturally, the topic was...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
Welcome to the 12th annual edition of Summer Shorts. This year’s edition features brief commentary on a handful of recent decisions by New York trial judges and appellate courts in a variety of business divorce cases...more
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
The current issue of The Business Lawyer, a quarterly publication of the ABA’s Business Law Section that rightly bills itself as “the premier business law journal in the country,” features a pair of dueling articles of great...more
In 2008, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery — one of the many intellectual giants and gifted writers who’ve occupied seats on that bench — published an article in the Delaware Journal of...more
The New York Times yesterday published an article entitled Climate Change Enters the Therapy Room discussing persons suffering from “climate anxiety.” As a northeasterner, the frigid, snow-blessed, ground-freezing winter...more
2/7/2022
/ Business Divorce ,
Business Litigation ,
Business Ownership ,
Derivative Suit ,
Estoppel ,
Family Businesses ,
Inter Vivos Gifts ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Payroll Taxes
If you ask me to name the most common skirmishes over the adequacy of pleadings at the outset of business divorce litigation, at or near the top of the list are motions to dismiss a dissident owner’s direct claims that should...more
If ever there was a ticking time bomb of a family-owned, closely held business more likely to result in business divorce litigation than the one in Matter of Brady v Brady, 2021 NY Slip Op 02705 [4th Dept Apr. 30, 2021], I...more
10/25/2021
/ Books & Records ,
Business Disputes ,
Business Divorce ,
Business Ownership ,
Closely Held Businesses ,
Declaratory Relief ,
Derivative Complaint ,
Derivative Suit ,
Family Businesses ,
Judicial Dissolution ,
Share Transfer ,
Shareholder Oppression ,
Stock Ownership
What do business divorce litigants have in common with the frill-necked lizard? At the outset of confrontation, they both use in terrorem tactics in an attempt to force their adversary into rapid submission....more
3/22/2021
/ Bank Fraud ,
Business Divorce ,
Derivative Suit ,
Judicial Dissolution ,
Legal Fees ,
Mail Fraud ,
Membership Agreements ,
RICO ,
Standard of Proof ,
Standing ,
Treble Damages ,
Wire Fraud
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
Welcome to this year’s edition of Winter Case Notes in which I highlight a collection of recent court decisions of interest to business divorce aficionados by way of brief synopses with links to the decisions for those who...more
2/24/2020
/ Appeals ,
Article III ,
Business Divorce ,
Business Litigation ,
Corporate Dissolution ,
Demand Futility ,
Derivative Suit ,
Shareholder Demands ,
Shareholder Litigation ,
Standing ,
Statute of Limitations ,
Time-Barred Claims
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
Business divorce cases more often than not include claims against the controlling owners for diversion or waste of company assets, usurpation of corporate opportunity, taking excessive compensation and the like. The party...more
I’m very pleased to present my 11th annual list of this past year’s ten most significant business divorce cases.
This year’s list includes four important appellate decisions, including one likely to stand as a landmark...more
12/31/2018
/ Appeals ,
Article III ,
Breach of Duty ,
Business Divorce ,
Business Ownership ,
Business Valuations ,
Closely Held Businesses ,
Corporate Counsel ,
Corporate Dissolution ,
Derivative Suit ,
Family Businesses ,
Fiduciary Duty ,
First Impression ,
Limited Liability Company (LLC) ,
Minority Shareholders ,
Partnerships ,
Standing
Last month gave us three noteworthy post-trial decisions in three different cases from three different states, all centering on disputes among business co-owners over the ownership and exploitation of the businesses’s core...more
12/3/2018
/ Business Divorce ,
Copyright ,
Corporate Dissolution ,
Derivative Suit ,
Family Businesses ,
Infringement ,
Intellectual Property Protection ,
IP License ,
License Agreements ,
Limited Liability Company (LLC) ,
Patents ,
Shareholders ,
Trademarks
You know there’s something unusual going on in a case involving a dispute between co-members of an LLC — a form of business entity that didn’t exist in New York until 1994 — when the key legal precedents cited in the parties’...more
Almost always there are elements of acrimony and intense emotion in litigation between co-owners of closely held business entities. The degree of toxicity can vary widely from case to case, although it tends to show up more...more
This winter forever will be remembered in the Northeast as the winter of the “bomb cyclone,” which gets credit for the 6º temperature and bone-chilling winds howling outside as I write this. So in its honor, I’m accelerating...more
When the tsunami of LLC enabling statutes swept the U.S. in the late ’80s and early ’90s, including New York in 1994, many included a default rule authorizing as-of-right member withdrawal and payment for the “fair value” of...more
12/11/2017
/ Appeals ,
Breach of Duty ,
Buyouts ,
Commercial Property Owners ,
Declaratory Judgments ,
Derivative Suit ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Transfer of Interest
I wish I could take credit for it, but I can’t. The phrase “bare naked assignee” was coined by the preeminent scholar and LLC maven Professor Daniel Kleinberger whose massive oeuvre (not to mention his guest posts on this...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
Board members’ decisions to award compensation packages for themselves can present some thorny issues. In a close corporation, shareholders typically serve as officers and directors, and have a reasonable expectation of...more