News & Analysis as of

Corporate Dissolution

Minority Shareholders’ Derivative Suit Foiled by Voiding of Corporation’s Charter for Nonpayment of Taxes

by Farrell Fritz, P.C. on

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

It’s Never Too Late to Gain Allies in Business Divorce Litigation

In closely-held businesses in New Jersey with multiple owners, it seems fairly obvious that the more co-owners you can recruit to your side in a business divorce litigation, the better. You don’t need a lawyer to tell you...more

Special Purpose Vehicles’ Authority to File for Bankruptcy Revisited

by Dechert LLP on

In order to file for bankruptcy in the United States, a company needs to secure the appropriate corporate authorizations as required by its governing documents. What happens when a debtor does not obtain appropriate...more

Federal Court No Mecca for Business Divorce Litigants

by Farrell Fritz, P.C. on

Civil litigation in federal court can be a luxury experience. The quality of the judiciary is superb. Federal judges often give their cases substantial individualized attention. Lawsuits progress relatively quickly. The...more

Finding No “Therapeutic” Benefit to Corporation, Court Denies Fee Award in Discontinued Shareholder Derivative Action

by Farrell Fritz, P.C. on

At first glance, you might think the plaintiff minority shareholder in Sardis v Sardis, 2017 NY Slip Op 27163 [Sup Ct Suffolk County May 11, 2017], achieved her derivative lawsuit’s goal when the defendant controlling...more

Pooley’s Corner: What Divorce Court Teaches About Trade Secret Litigation

I still remember the day I decided never to do another divorce case. My client called to tell me that her ex was taking the kids to his mother’s house where she would look for holes in their socks and then rip them with her...more

Assignment of LLC Interest Defeats Standing Despite Alleged Lack of Consideration

by Farrell Fritz, P.C. on

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

Appellate Court Notes

by Pullman & Comley, LLC on

Supreme Court Advance Release Opinions: SC19734 - Wall Systems, Inc. v. Pompa - Plaintiff - construction company - discovered one of its supervisors who was paid ~$200k/year was working for a competitor at the same...more

Withdraw a Dissolution Claim? Not So Fast

by Farrell Fritz, P.C. on

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

Business Divorce Nation: Five States, Five Cases

by Farrell Fritz, P.C. on

It’s true that the statutory and common-law rules at play in business divorce cases can vary widely from state to state. But it’s also true that court decisions in one state can influence courts in other states, and can...more

Beware Diversity Trap in Federal Court Business Divorce Cases Involving LLCs

by Farrell Fritz, P.C. on

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

Unpacking Your LLC: Tax Considerations in Limited Liability Company Liquidations

by Smith Anderson on

Has your LLC lost its luster? Has it outlived its usefulness as an asset management, asset protection, or, dare we say it, wealth transfer vehicle? Are you tired of discussing the company’s operations with the other owners?...more

What If I Was Doing The Same Thing I Now Want to Sue Over?

Many clients ask at the start of a business divorce lawsuit, “Is it fatal to a shareholder oppression claim if I was doing some of the same things that the majority owners are doing that I am now complaining about?” As often...more

An Oppression How-To: Revoke Employment, Profit Sharing and Control

by Farrell Fritz, P.C. on

An earlier post on this blog, examining a post-trial decision in Matter of Digeser v Flach, 2015 NY Slip Op 51609(U) [Sup Ct Albany County Nov. 5, 2015], described the minority shareholder’s dissolution claim under Section...more

Winter Case Notes: De Facto Partnership and Other Recent Decisions of Interest

by Farrell Fritz, P.C. on

Welcome to another edition of Winter Case Notes in which I clear out my backlog of recent court decisions of interest to business divorce aficionados by way of brief synopses with links to the decisions for those who wish to...more

Court of Appeals Grants Leave to Appeal in Partnership Dissolution Case

On January 10, 2016, the New York Court of Appeals decided to hear a case that has significant consequence in the field of partnership dissolution. The case, Congel v. Malfitano,[1] concerns the allegedly wrongful...more

Delaware Law Updates - 2016 Year in Review

by McCarter & English, LLP on

Our Delaware Corporate and Alternative Entity Law attorneys closely followed the opinions coming from Delaware’s Supreme Court and Court of Chancery. Our 2016 Year in Review is a collection of brief summaries of selected...more

Court of Appeals to Decide Controversial Partnership Dissolution Case

by Farrell Fritz, P.C. on

In a controversial ruling last year in Congel v Malfitano, the Appellate Division, Second Department, affirmed and modified in part a post-trial judgment against a former 3.08% partner in a general partnership that owns an...more

Announcing Must-Have Treatise on Business Divorce Litigation

by Farrell Fritz, P.C. on

There’s little doubt in my mind that “business divorce” has achieved name recognition as a distinct subgenre of commercial litigation whose regular practitioners, by dint of experience dealing in and out of court with the...more

Top 10 Business Divorce Cases of 2016

by Farrell Fritz, P.C. on

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

Business Litigation Alert: "To Protect Yourself from a Business Divorce - Agree to a Prenup"

by Porter Hedges LLP on

When a business breaks up, it can often be very similar to the dissolution of a marriage. One prime example of this is the case of TransPerfect Global, Inc. (TransPerfect), a very successful language translation company...more

Corporate dissolution will not protect former directors and officers from environmental liabilities

by Dentons on

On December 10, 2016, Ontario’s Forfeited Corporate Property Act, 2015 (the FCPA), comes into force,1 along with related amendments to the Ontario Business Corporations Act (the OBCA).2 Directors and officers may be aware of...more

Court Addresses “Fair Value” Determination In Statutory Buyout Proceeding

by Allen Matkins on

When when a shareholder sues for involuntary dissolution, the corporation, or the holders of 50% or more of the voting power of the corporation, may avoid the dissolution by purchasing for cash the plaintiff’s shares at their...more

Who Knew That A Motion To Transfer Venue Could Be So Complicated?

by Brooks Pierce on

North Carolina cases that are filed in an "improper county" can be transferred to the "proper county" if the "defendant, before the time of answering expires, demands in writing that the trial be conducted in the proper...more

Delaware Law Updates – Board’s Adoption of a Plan of Dissolution Held Not to Be a Breach of the Directors’ Fiduciary Duties

by McCarter & English, LLP on

In The Huff Energy Fund, L.P. v. Gershen, C.A. No. 11116-VCS (Del. Ch. Sept. 29, 2016), the Delaware Court of Chancery dealt with the issue of whether a company’s decision, approved by its board of directors and its...more

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