Occasionally, we come across court cases in which the majority owners so egregiously mistreated their minority co-owners that it’s difficult not to write about it — if only as a lesson in what not to do to separate oneself as...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
With the growing prevalence of limited liability companies, notable general partnership decisions become fewer and further between with each passing year....more
Do New York’s Surrogate’s Courts have jurisdiction to compel an accounting related to a non-party limited liability company in which the decedent’s estate has only a minority interest?
...more
8/28/2023
/ Article III ,
Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Closely Held Businesses ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Standing ,
Surrogate's Court ,
Trust Accounting
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
Closely-held business owner breakups often defy easy categorization. What seem at first blush to be traditional business divorce cases sometimes end up treading far into other legal practice areas. Other disputes blur...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
No corporate lawyer wants to get drawn into a nasty litigation between an entity’s owners. But the reality is that corporate and general counsel often find themselves unwittingly ensnared in business divorce cases. Sometimes...more
Litigants assert with growing frequency “faithless servant” claims in business divorce cases. New York’s faithless servant doctrine, and the legal standards governing faithless servant claims, emanate from two ancient...more
Litigated business breakups are often highly intense and emotional for the participants. The intensity and emotion multiply when the litigants are close family members....more
Nine months ago, we wrote about a 20% shareholder, Alvin Clayton Fernandes, whose bare bones petition Manhattan Supreme Court Justice Frank P. Nervo found stated sufficient grounds to judicially dissolve a seemingly...more
This important question of whether non-manager, minority limited liability company owners owe fiduciary duties continues to bedevil New York litigants and courts.
The prevailing state of the law remains unsettled, with...more
Folks hearing the phrase “business divorce” for the first time tend to focus unconsciously on the word “divorce,” tuning out the word “business.” The irony is that most business divorce cases have nothing to do with...more
One of the pleasures of being a litigator is that we constantly learn. The pleasure multiplies as a law blogger, where articles we write inspire litigation arguments, and litigations we fight inspire articles....more
Food trucks have become as ubiquitous on the streets of Manhattan as pigeons in Central Park. Unsurprisingly, the New York City food truck business is highly regulated, requiring licensure of those participating in 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
For most business divorce litigants, a dispositive win on the merits, even in a summary proceeding, can take years. Appraisal proceedings following a cash-out merger, for example, may involve multiple years of difficult...more
10/10/2022
/ Business Divorce ,
Commercial Litigation ,
CPLR ,
EB-5 ,
Foreign Investment ,
Limited Partnerships ,
Mergers ,
Net Profits ,
Partnership Agreements ,
Real Estate Development ,
Summary Judgment ,
Use of Proceeds
The legal concept of “conflicts of laws” is difficult, to say the least, confounding even seasoned litigators and judges, with bulky treatises and entire law school classes devoted to the subject....more
9/12/2022
/ Breach of Contract ,
Breach of Duty ,
Business Divorce ,
Business Litigation ,
Choice-of-Law ,
Constructive Trusts ,
Conversion ,
Delaware General Corporation Law ,
Internal Affairs Doctrine ,
Misappropriation ,
Unjust Enrichment
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
A rarely litigated provision of the New York Limited Liability Company Law (the “LLC Law”), Section 1006, authorizes the conversion of a general or limited partnership to a New York LLC through a statutorily-prescribed...more
The topic of mergers between two business entities designed to involuntarily extinguish the equity interest of a minority owner in exchange for cash is one of our favorites on New York Business Divorce. Almost invariably...more
A year and a half ago, we blogged about a decision in which Bronx County Supreme Court Justice Llinet M. Rosado ruled that a shareholder’s alleged stock transfer through a bequest in his last will and testament was...more
6/27/2022
/ Business Divorce ,
Business Litigation ,
Business Ownership ,
Buy-Sell Agreements ,
Declaratory Judgments ,
Family Businesses ,
Fiduciary Duty ,
Malicious Prosecution ,
Order to Show Cause ,
Ownership Interest ,
Preliminary Injunctions ,
Shareholders' Agreements ,
Stock Transfer Restrictions ,
Tortious Interference ,
Wills