To prevail on a cause of action in a business divorce lawsuit, the plaintiff has many essential boxes to check. Pleading requirements vary from one claim to another, but all business divorce cases have one thing in common....more
If Sisyphus were a judge, he’d be assigned the Fuks case. Fuks began on December 26, 1996. Fire up your mental time machine, travel back in time, and picture what was going on in your life those many years ago....more
Closely-held business entities come in all shapes and sizes. By definition, under Partnership Law § 10, it takes “two or more” owners to form a general partnership. But corporations and LLCs have no such impediment, ranging...more
5/17/2024
/ Board Members ,
Breach of Duty ,
Business Entities ,
Business Litigation ,
Business Ownership ,
Corporate Governance ,
Derivative Suit ,
Dispute Resolution ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Partnerships ,
Shareholders
Closely-held business entities come in all shapes and sizes. By definition, under Partnership Law § 10, it takes “two or more” owners to form a general partnership. But corporations and LLCs have no such impediment, ranging...more
Sections 706 (d) and 716 (c) of the Business Corporation Law (the “BCL”) both contain a “for cause” standard for judicial removal of corporate directors and officers. Complaints with claims for judicial corporate director and...more
Imagine devoting years of costly litigation to rescinding a $1 million equity investment in an LLC for fraudulent inducement, prevailing on the merits by clear and convincing evidence after a full trial, but losing anyway...more
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
Dismissals for lack of standing are routine in business divorce cases. Examples abound on this blog. Litigation over standing to sue takes an outsized role in business divorce cases for many reasons....more
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
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
In shareholder derivative litigation, defendants occasionally argue that the plaintiff – who ostensibly sues on behalf of the company and its owners in a fiduciary capacity – has some form of conflict of interest with the...more
You know you’re in big trouble if the post-trial decision in a lawsuit you filed begins like this:
“The court finds the plaintiff, Rowen Seibel, not credible. This is primarily because it appears he fabricated evidence...more
A number of lawsuits have percolated through New York’s courts over the past five years between Adam Max, son of world-renowned visual artist Peter Max, and Adam’s sister, Libra, over control and management of the family...more
5/23/2022
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Judgment Rule ,
Derivative Suit ,
Exculpatory Clauses ,
Family Businesses ,
Fiduciary Duty ,
Fine Art ,
Hostile Takeover ,
Negligence ,
Personal Liability
Last week, Peter Mahler blogged about a recent decision holding that a minority shareholder’s claim against its majority co-owners for breach of fiduciary duty in connection with a sale of the business to a third party...more
In the famous case of Meinhard v Salmon, Justice Benjamin Cardozo wrote in lofty language that lawyers of maltreated business owners have loved to quote ever since that the duty of loyalty among closely-held business owners...more
7/7/2020
/ Appeals ,
Attorney's Fees ,
Breach of Duty ,
Calculation of Damages ,
Common Law Torts ,
Derivative Suit ,
Disgorgement ,
Duty of Loyalty ,
Fiduciary Duty ,
Legal History ,
Self-Dealing
We’ve written from time to time, about the need to allege pre-suit demand or demand futility where a shareholder seeks to sue derivatively on behalf of a corporation for whom the court has appointed a receiver....more
Like business divorce, New York trusts and estates litigation (“T&E”) is a highly specialized niche of the law. T&E litigators have their own universe of substantive law, their own set of procedural rules – the Surrogate’s...more
9/3/2019
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Ownership ,
Corporate Dissolution ,
Decedent Protection ,
Derivative Suit ,
Director Removal ,
Estate Planning ,
Fiduciary Duty ,
Jurisdiction ,
Legitimate Business Interest ,
Surrogate's Court
In business divorce litigation, petitioners / plaintiffs often want to start the case with a bang. A common tactic is to file a petition / complaint simultaneously with an injunction motion. Often there is a real need for an...more
Under the right set of facts, New York courts occasionally find remedies for LLC owners not explicitly authorized in the Limited Liability Company Law (“LLC Law”). Judges have a natural inclination to try to find solutions...more
New York’s LLC judicial dissolution statute, Section 702 of the Limited Liability Company Law, provides far more limited grounds to dissolve a business than the Business Corporation Law – a harsh reality for allegedly...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