New York’s appellate courts are breaking new ground in 2025.
Until a month ago, I would have said that “deadlock” most certainly is not enough on its own to dissolve a New York LLC....more
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
Almost exactly one year ago, we wrote about the go-to line of New York case law for business divorce litigants hoping to secure injunctions: a substantial and ever growing body of authority holding that involuntary loss or...more
Is a limited liability company a party to and bound by its own operating agreement?
Many folks would say, “Yes, of course.” But it turns out the answer varies depending upon the law of the company’s state of...more
Jury trials in business divorce litigation are uncommon. Bifurcated business divorce jury trials are all but nonexistent. But in Aronov v Khavinson (81 Misc3d 1242(A) [Sup Ct, Kings County Feb. 9, 2024]), we encounter the...more
In last week’s New York Business Divorce, we wrote about an important decision from New York’s highest court, Sage Sys., Inc. v Liss (___ NY3d ___, 2022 NY Slip Op 05918 [Ct App Oct. 20, 2022]). In Sage, the Court of Appeals...more
The universe works in mysterious ways. Four days ago, when I sat down to write this article, my plan was to feature a decision from Manhattan Commercial Division Justice Andrea J. Masley denying dismissal of a closely-held...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
Closely-held business owners often hope to avoid the costs and delays of litigation by including arbitration provisions in their partnership, shareholder, and operating agreements. Things can get tricky, though, when...more
In Congel v Malfitano, New York’s highest court wrote that business partners are free to include in partnership contracts practically “any agreement they wish,” including about “the means by which a partnership will dissolve,...more
3/14/2022
/ Appeals ,
Business Divorce ,
Closely Held Businesses ,
Contract Disputes ,
Contract Terms ,
Delaware General Corporation Law ,
Dissolution ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Partnership Agreements ,
Public Policy
The harried realities of modern life are such that business entity organizational documents, like LLC operating agreements, sometimes do not get drafted or executed until long after the entity’s initial formation with the...more
Most folks associate beer with pleasure. Many craft brewers will tell you they went into business for that reason: to make themselves and others happy (and, oh yeah, make money). ...more
9/13/2021
/ Breach of Contract ,
Breach of Duty ,
Breweries ,
Business Divorce ,
Business Litigation ,
Dilution ,
Freeze-Out Mergers ,
Limited Liability Company (LLC) ,
Membership Interest ,
Motion To Enjoin ,
Operating Agreements ,
Preliminary Injunctions ,
Startups
In an article from a little over a month ago, we summarized New York’s LLC judicial dissolution statute with the comment, “Breaking up can be hard to do.”...more
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
Ten months ago, we wrote about an unusual case involving an LLC member who documented two irreconcilable membership interest transfers upon death. In Harris v Harris, 2020 NY Slip Op 31570(U) [Sup Ct, NY County Apr. 23,...more
Oral agreements to form and operate business enterprises are a recurring subject of this blog. We’ve written many times, for example, about the comparative ease vis-a-vis other kinds of entities with which one can...more
3/15/2021
/ Breach of Duty ,
Business Divorce ,
Business Formation ,
Business Litigation ,
Fiduciary Duty ,
Fraudulent Conveyance ,
Joint Venture ,
Operating Agreements ,
Oral Contracts ,
Partnership Agreements ,
Unjust Enrichment
Many business divorce practitioners are familiar with a phenomenon one might call “petitioner’s remorse” – an often abrupt abandonment of one’s desire to dissolve a closely-held business entity when the opposing party...more
Oral agreements – and oral modifications of written agreements – are a constant source of litigation in business divorce cases. Alleged oral agreements are subject to attack based upon legal enforceability – as well as their...more
8/24/2020
/ Business Disputes ,
Business Divorce ,
Contract Terms ,
Covered Transactions ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Oral Argument ,
Partnership Agreements ,
Partnerships ,
Shareholders ,
Unenforceable Contract Terms
Corporate shareholder and LLC operating agreements routinely contain provisions addressing the transfer of equity interests upon the death of an owner of a closely-held business. Such provisions are vital for succession...more
6/8/2020
/ Business Continuity Plans ,
Business Divorce ,
Business Litigation ,
Business Succession ,
Closely Held Businesses ,
Contract Terms ,
Decedent Protection ,
Equity ,
Estate Planning ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Ownership Interest ,
Probate
The ongoing coronavirus / COVID-19 pandemic has quite literally impacted everyone and everything in New York, including the courts, which were forced to temporarily cease non-essential functions. The result was a short-lived...more
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
The sudden death of Alexander Calderwood, the brilliant but troubled co-founder of the Ace brand of hotels, resulted in some fierce litigation between Calderwood’s estate and Calderwood’s LLC co-member over the nature of his...more
12/27/2017
/ Appeals ,
Business Ownership ,
Contract Terms ,
Decedent Protection ,
Declaratory Judgments ,
Delaware Limited Liability Company Act ,
Discovery ,
Dismissals ,
Estate Claims ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Real Party in Interest ,
Transfer of Interest ,
Wills
A dissolution petitioner received the judicial equivalent of the old quip “Where’s the beef?” in a Brooklyn appeals court decision last week reversing an order dissolving a limited liability company under Section 702 of the...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
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