If a written limited partnership agreement contains detailed provisions governing partner withdrawal and dissolution, can a court nonetheless look to the statutory “default rules” in the Revised Limited Partnership Act (the...more
Five years ago, we wrote about an important decision from the Delaware Chancery Court, In re Carlisle Etcetera, LLC, 114 A3d 592 [2015], in which a court recognized for the first time the existence under Delaware law of a...more
In Jacobs v Cartalemi, now the leading case on the subject of LLC member withdrawal (which our firm had the pleasure of litigating), the Appellate Division – Second Department repeated a well-established principle of law:...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
The mystique of the jury trial is deeply embedded in the social consciousness of our country. Non-lawyers who think of litigation tend to recall courtroom thrillers like To Kill a Mockingbird, Erin Brockovich, or...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
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
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
March 23, 2020 As companies of all size across the State of New York reel from the Coronavirus outbreak, business owners are looking for ways to mitigate their losses. One avenue that must be considered is availability of...more
Section 1104-a of the Business Corporation Law (the BCL) empowers courts to dissolve a corporation if the petitioning shareholder can establish either of two specified grounds for dissolution. Section 1104-a(a)(1) authorizes...more
Business Divorce 101: To be entitled to an accounting of a closely-held business, the plaintiff or petitioner must demonstrate the existence of a fiduciary relationship giving rise to a duty to account....more
2/18/2020
/ Appeals ,
Business Divorce ,
Business Litigation ,
Closely Held Businesses ,
Commercial Court ,
Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Pro Rata Allocation Rule ,
Shareholder Distributions ,
Standing
There are countless New York corporations in which the owners are equal 50/50 shareholders and co-members of a two-member board. Where one sues the other for judicial dissolution, and the ground for dissolution is “deadlock”...more
1/20/2020
/ Business Disputes ,
Business Divorce ,
Business Litigation ,
Corporate Deadlock ,
Corporate Dissolution ,
Counterclaims ,
Cross Motions ,
Dissenters Rights ,
Judicial Dissolution ,
Motion to Dismiss ,
Resignation ,
Right to Control ,
Shareholder Litigation ,
Shareholders ,
Sole Proprietorship
In litigation, the term “spoliation” generally refers to loss or destruction of evidence. Spoliation can involve physical evidence, paper documents, or electronic data. Spoliation can be intentional or unintentional....more
12/23/2019
/ Business Divorce ,
Business Litigation ,
Commercial Court ,
Contempt ,
Counterclaims ,
Discovery ,
Electronically Stored Information ,
Evidence ,
Judicial Dissolution ,
Misappropriation ,
Motion To Strike ,
Motions in Limine ,
Spoliation ,
TRO
My last post on the subject of advancement and indemnification summarized the basic rules by which closely-held business owners, officers, directors, managers, and members may be entitled to use company funds to pay their...more
Under the so-called “American Rule,” litigants usually must pay their own lawyer fees. But in business divorce and other private company disputes between business co-owners, there are a variety of ways for individual...more
Earlier this year, we wrote about a partnership dispute involving a prominent insurance litigation firm, D’Amato & Lynch, LLP. In that case, a lawyer who enjoyed the title and certain trappings of “partner” tried, but failed,...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
Strict procedural rules apply to corporate dissolution proceedings in New York, a difficult truth learned the hard way by a five-time rejected, would-be dissolution petitioner in a recent decision by Bronx County Supreme...more
8/6/2019
/ Breach of Duty ,
Business Divorce ,
Conversion ,
Corporate Dissolution ,
Embezzlement ,
Fiduciary Duty ,
Fraud ,
Holding Companies ,
Motion to Dismiss ,
Motion to Show Cause ,
White Collar Crimes
Two years ago, we wrote about a bitter rivalry between two brothers, James and Vincent Cortazar, over their ownership and management of a single-asset real estate enterprise, 47th Road LLC, which owned an apartment building...more
Often business owners enter into arbitration agreements because they hope it will result in a speedier, less expensive resolution than litigation to disputes with their co-owners. ...more
Over the years, we’ve written a lot about limited partnership, corporation, and LLC “fair value” appraisal proceedings....more
5/13/2019
/ Appraisal ,
Business Divorce ,
Business Valuations ,
Buyouts ,
Closely Held Businesses ,
Deadlines ,
Dissenters Rights ,
Fair Value Standard ,
Freeze-Out Mergers ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Triggering Event
One of the great ironies of New York business divorce litigation is that so much of it involves the breakup of law firms. Perhaps it’s because New York is the center of the legal universe and the home state of thousands of...more
Years ago, we wrote about the perils of “impromptu” settlements in business divorce cases – settlements eked out at the courthouse, on the fly, under pressure, during conferences, hearings, or trials. The resulting agreements...more
It’s simply in the nature of things that business divorce litigants tend to accuse one another of all manner of heinous, dastardly misdeeds. Phrases like “oppression,” “fraud,” “deceit,” “theft,” “siphoning” of assets,...more