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Shareholders Business Disputes

White & Case LLP

The Government of Georgia defeats an ICC arbitration claim of US$ 1.5 billion at its highest over its termination of an investment...

White & Case LLP on

On 29 July 2024, an ICC arbitration tribunal, chaired by Stephen Drymer and including Jean Kalicki and Charles Adams as co-arbitrators, issued, by majority, an award in favour of the Government of Georgia in a high-profile...more

Farrell Fritz, P.C.

Dollars, Donuts, and Buy-Sell Options

Farrell Fritz, P.C. on

Buy-sell agreements come in all shapes and sizes. Some are straightforward. Others are outrageously complex, especially purchase price formulas. Some have triggers for death. Others disability. Retirement. Expulsion....more

Farrell Fritz, P.C.

Special Considerations for Law Firm Breakups

Farrell Fritz, P.C. on

Just a few weeks ago, I commented on a recent uptick in disputes centered on the breakup of professional services firms. In those disputes, we expect that the demands of the legal, accounting, and medical professions draw...more

Farrell Fritz, P.C.

And the Award for Most Creative Attempt to Evade a Book Value Buy-Sell Provision Goes To . . .

Farrell Fritz, P.C. on

“Under any standard of value, the true economic value of a business enterprise will equal the company’s accounting book value only by coincidence . . .” says the late business valuation expert and author Shannon Pratt.  So...more

Farrell Fritz, P.C.

Enforcing the Guardrails on Transactions Involving Interested Directors of Close Corporations

Farrell Fritz, P.C. on

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

Farrell Fritz, P.C.

Top 10 Business Divorce Cases of 2023

Farrell Fritz, P.C. on

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

Farrell Fritz, P.C.

Proceed with Caution: Strategy Considerations Before Making a Books and Records Demand

Farrell Fritz, P.C. on

The books and records demand often is the opening act in business divorce litigation. The relatively low burden that an owner must meet in order to obtain access to a company’s books and records, and the availability of an...more

A&O Shearman

Addressing The Enforceability Of Con Ed Provisions In Merger Agreements, Delaware Court Of Chancery Rejects Petition For...

A&O Shearman on

On October 31, 2023, Chancellor Kathaleen St. J. McCormick of the Delaware Court of Chancery issued final judgment denying a petition for a mootness fee award to a stockholder—who had previously asserted claims for breach of...more

Farrell Fritz, P.C.

How to Stop a Cash-Out Merger from Cancelling Your Shares

Farrell Fritz, P.C. on

The corporation of which you are a shareholder just sent you notice that it plans to merge with another corporation.  And although the other existing shareholders will have their shares exchanged for shares of the new...more

Lathrop GPM

The Importance of a Buy-Sell Agreement for Business Owners

Lathrop GPM on

If you are the owner of a business that does not have a buy-sell agreement in place, or you have not reviewed your buy-sell agreement recently, it may be time to sit down with your attorney. Buy-sell agreements can be complex...more

Stikeman Elliott LLP

Limitations on Good Faith Damages: No Presumption of Loss for Breach of Honest Performance

Stikeman Elliott LLP on

In Bhatnagar v. Cresco Labs Inc., 2023 ONCA 401, the Ontario Court of Appeal elaborated on the Supreme Court’s decision in C.M. Callow Inc. v. Zollinger, 2020 SCC 45 (“Callow”) and clarified that a breach of the contractual...more

Epstein Becker & Green

What to Do When Your Distribution Checks Stop Arriving

Epstein Becker & Green on

For months, if not years, you received distribution checks from the business in which you own an interest. The funds came without question and like clockwork. You relied on them. Then suddenly, they stopped coming. Is this...more

Farella Braun + Martel LLP

Disputes Between Shareholders May Not Be Governed by Fiduciary Duties but Could Be Covered by Insurance

Disputes regarding ownership interests often arise in the context of closely held corporations, particularly when directors, officers, or majority shareholders sell or acquire ownership interests in the company. These...more

Farrell Fritz, P.C.

Can a Shareholder Suing Derivatively Face Countersuit Individually?

Farrell Fritz, P.C. on

That was the interesting, infrequently-litigated question addressed in a recent decision by Manhattan Commercial Division Justice Melissa A. Crane. Simon v FrancInvest, S.A. (2023 NY Slip Op 32422[U] [Sup Ct, NY County...more

Patton Sullivan Brodehl LLP

“Business Judgment Rule” Applies to HOAs

California’s common law “business judgment rule,” as described by the courts, protects from court intervention “those management decisions which are made by directors in good faith in what the directors believe is the...more

Farrell Fritz, P.C.

Can One 50% Shareholder Sue the Other in the Company Name on the Company Dollar? Answer: It Depends

Farrell Fritz, P.C. on

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

Farrell Fritz, P.C.

Must a Professional Corporation Redeem the Shares of its Retired Shareholders?

Farrell Fritz, P.C. on

I previously wrote that one of the most difficult periods in the lifecycle of a closely held business is the period following the death of an owner, due to the tension between the remaining owners wishing to continue the...more

Freiberger Haber LLP

Derivative Standing and The Internal Affairs Doctrine

Freiberger Haber LLP on

By: Jeffrey M. Haber The internal affairs doctrine is a “conflict of laws principle which recognizes that only one State should have the authority to regulate a corporation’s internal affairs—matters peculiar to the...more

Farrell Fritz, P.C.

Derivative Standing and the Internal Affairs Doctrine

Farrell Fritz, P.C. on

Choice-of-law questions in shareholder derivative lawsuits venued in New York courts involving out-of-state or international entities can be confoundingly difficult, even for appeals court judges....more

Patterson Belknap Webb & Tyler LLP

Commercial Division Rejects Co-Owner's Petition for Judicial Corporate Dissolution Amidst Protracted Unwinding of a Bronx Family...

New York Business Corporation Law (“BCL”) sections 1104 and 1104-a permit shareholders holding a certain percentage of shares in a corporation to petition for judicial dissolution of that corporation....more

Farrell Fritz, P.C.

Misappropriated Watering Hole Becomes Money Judgment Sinkhole

Farrell Fritz, P.C. on

Occasionally, we come across post-trial decisions with such scathing rebuke of one side that it’s difficult to imagine why the loser ever chose to take the case to trial. O’Mahony v Whiston is a perfect example....more

Robson & Robson, P.C.

Without Equal? Pennsylvania Federal Court Charts New Path, Rules Fiduciary Duty Exists Between 50/50 Co-owners Of A Business

Robson & Robson, P.C. on

There is arguably no more prevalent legal claim in business divorces than a claim of breach of a fiduciary duty. Simply put (and I do mean simply), when one person owes a fiduciary duty to another, the person with the duty...more

Farrell Fritz, P.C.

First Department Recognizes Cause of Action for Specific Performance of LLC Member Voting Agreement

Farrell Fritz, P.C. on

In 1941, two of the three shareholders of Ringling Bros.-Barnum & Bailey Combined Shows, Inc. entered into an agreement stating that they would vote their combined 630 of the outstanding 1000 shares of Ringling Bros. stock...more

Robson & Robson, P.C.

Can Closely Held Companies Investigate Shareholder Complaints Without Breaking The Bank?

Robson & Robson, P.C. on

Last month, we tackled Pennsylvania’s “universal” demand requirement. As a refresher, unlike many states, Pennsylvania will not excuse the shareholder of a company who wants the company to sue its executives or directors from...more

Robson & Robson, P.C.

Ain’t Nothing Like The Real Thing

Robson & Robson, P.C. on

In Pennsylvania, Manufactured Deadlocks are Unlikely to Trigger Judicial Dissolution - In disputes among the owners of a closely held company, involuntary judicial dissolution is the nuclear option....more

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