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
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
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 proverb “All for the want of a horseshoe nail” aptly describes the possibly mortal blow dealt by the Appellate Division’s recent decision in Favourite Ltd. v Cico, 2020 NY Slip Op 01463 [1st Dept Mar. 3, 2020], to a...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
What makes someone a member of an LLC?
It’s a question that frequently arises in business divorce cases involving LLCs that have no written operating agreement much less certificated membership interests. ...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
After two years, 300+ docket entries, and 12 motions, a lawsuit among members of a Delaware LLC that owned a 5-story apartment building on Manhattan’s Upper East Side (the “UES Building”) acquired to provide short-term...more
12/10/2018
/ AirBnB ,
Article III ,
Books & Records ,
Breach of Duty ,
Commercial Court ,
Fiduciary Duty ,
Leave to Amend ,
Limited Liability Company (LLC) ,
Rental Property ,
Short-Term Lease ,
Standing ,
Subject Matter Jurisdiction ,
Vacation Rentals
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
The self-proclaimed entrepreneur and guiding force behind his soon-to-be ex-wife’s highly successful, multi-office pediatric dental practice known as Kiddsmiles is not smiling after the court in Savel v Savel, Short Form...more
11/6/2017
/ Article III ,
Business Litigation ,
Business Ownership ,
Constructive Trusts ,
Dental Practice ,
Dismissals ,
Divorce ,
Kickbacks ,
Limited Liability Company (LLC) ,
Partnerships ,
Standing
Over the years I’ve litigated and observed countless cases of alleged oppression of minority shareholders by the majority. Oppression can take endlessly different forms, some more crude than others in their execution, some...more
A business’s failure to pay state taxes can be a problem if the entity later wants to bring a lawsuit, or its non-controlling owners want to sue on the entity’s behalf....more
The rules of “standing” in business divorce litigation generally require that the plaintiff have an ownership interest in the business entity at the time of the alleged wrongful conduct and, for derivative claims brought on...more
The U.S. reportedly has the world’s highest number of lawyers per capita (1 for every 300 people) and the 5th highest number of lawsuits per capita (74.5 for every 1,000 people, topped only by Germany, Sweden, Israel, and...more
I can count on one hand the number of federal court cases I’ve featured on this blog since I started it almost 10 years ago — and that’s no coincidence....more
Oh, the things that can happen when the LLC members identified in the company’s operating agreement differ from those identified in official documents submitted to government agencies....more
I’m pleased to present my 9th annual list of this past year’s ten most significant business divorce cases. The list includes important appellate rulings by the First and Second Departments on dissolution of foreign business...more
12/27/2016
/ Appeals ,
Appraisal ,
Books & Records ,
Breach of Duty ,
Corporate Dissolution ,
Derivative Suit ,
Enabling Laws ,
Fiduciary Duty ,
First Impression ,
Foreign Business Partners ,
Foreign Entities ,
Jurisdiction ,
Limited Liability Company (LLC) ,
LLC Agreements ,
Merger Agreements ,
NJ Supreme Court ,
Partnership Interests ,
Popular ,
Shareholder Rights ,
Shareholders' Agreements ,
Standing
What makes a shareholder a shareholder? What makes an LLC member a member?
The simplicity of the questions belies the difficulties and endlessly unique fact patterns encountered in case after case involving close...more
12/19/2016
/ Breach of Duty ,
Closely Held Businesses ,
Declaratory Judgments ,
Fiduciary Duty ,
Hiring & Firing ,
Judicial Dissolution ,
Likelihood of Success ,
Limited Liability Company (LLC) ,
Members ,
Membership Interest ,
Operating Agreements ,
Preliminary Injunctions ,
Shareholders ,
Standing ,
Stock Purchase Agreement ,
Stock Transfer Restrictions