Over the years I’ve become less enamored with arbitration as an alternative to litigating complex business cases in court, mostly because the traditional trade-off between abundant due process protections (court) versus...more
With apologies to the pseudonymous children’s book author Watty Piper, this is the story of a humble buy-sell provision in a family-owned LLC’s operating agreement that temporarily ran out of steam in the lower court, only to...more
2/3/2025
/ Appellate Courts ,
Business Litigation ,
Business Ownership ,
Buy-Sell Agreements ,
Buyouts ,
Declaratory Judgments ,
Family Businesses ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Shareholders ,
Summary Judgment
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
12/27/2023
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Business Ownership ,
Fiduciary Duty ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Shareholders
Husband owns 99% membership of manager-managed LLC. Children own remaining 1%. Postnuptial agreement says husband’s “interest” in LLC goes to wife. LLC agreement says any transferee is not admitted as a member absent the...more
Longtime readers of this blog may recall a post I wrote three years ago titled Minority Shareholder Oppression in the #MeToo Era. The post highlighted an apparent first-of-its-kind decision in a judicial dissolution case...more
The New York Times yesterday published an article entitled Climate Change Enters the Therapy Room discussing persons suffering from “climate anxiety.” As a northeasterner, the frigid, snow-blessed, ground-freezing winter...more
2/7/2022
/ Business Divorce ,
Business Litigation ,
Business Ownership ,
Derivative Suit ,
Estoppel ,
Family Businesses ,
Inter Vivos Gifts ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Payroll Taxes
If ever there was a ticking time bomb of a family-owned, closely held business more likely to result in business divorce litigation than the one in Matter of Brady v Brady, 2021 NY Slip Op 02705 [4th Dept Apr. 30, 2021], I...more
10/25/2021
/ Books & Records ,
Business Disputes ,
Business Divorce ,
Business Ownership ,
Closely Held Businesses ,
Declaratory Relief ,
Derivative Complaint ,
Derivative Suit ,
Family Businesses ,
Judicial Dissolution ,
Share Transfer ,
Shareholder Oppression ,
Stock Ownership
This episode features an interview with Paul Hood, an experienced estate planner, leading expert on the design and drafting of buy-sell agreements, and author of a newly published book, “Buy-Sell Agreements: The Last Will and...more
The Cummins Nursery in upstate New York grows, harvests, plants, and grafts fruit trees — mainly apple trees — which along with scions and rootstocks it sells by the tens of thousands each year. There’s also a farm stand and...more
“I don’t get no respect” was a famous Rodney Dangerfield comedy routine. It also could be ascribed albeit less comedically to tiebreakers assigned the often thankless task of resolving deadlock between 50/50 owners or...more
I don’t know if empirical studies have been done comparing the relative frequency or ratio of disputes and litigation over member status in LLCs versus shareholder status in close corporations. My impression as an avid...more
Buyers of fine art must investigate the work’s provenance before closing the deal. The same holds true for anyone contemplating the acquisition by assignment of a membership interest in a limited liability company....more
This episode features the second half of a conversation with Associate Professor Peter Molk who teaches business law at the University of Florida Levin College of Law and who recently published in the U.C. Davis Law Review a...more
This episode features Part One of a two-part conversation with Associate Professor Peter Molk who teaches business law at the University of Florida Levin College of Law and who recently published in the U.C. Davis Law Review...more
Business divorce cases more often than not include claims against the controlling owners for diversion or waste of company assets, usurpation of corporate opportunity, taking excessive compensation and the like. The party...more
Normally you don’t associate the lucrative sale of a closely held business with bitter disputes among the co-owners leading to judicial dissolution proceedings. When the cake is big enough, the thinking goes, each owner walks...more
6/24/2019
/ Business Ownership ,
Business Succession ,
Business Transfer Agreements ,
Closely Held Businesses ,
Family Businesses ,
Forum Selection ,
Judicial Dissolution ,
Post-Closing Rights ,
Selling a Business ,
Stock Ownership ,
Succession Planning
When it comes to business valuation principles in contested appraisal proceedings, I’d say the 50 states have far more in common than separates them. Certainly this is true in cases applying the fair market value standard...more
I’m very pleased to present my 11th annual list of this past year’s ten most significant business divorce cases.
This year’s list includes four important appellate decisions, including one likely to stand as a landmark...more
12/31/2018
/ Appeals ,
Article III ,
Breach of Duty ,
Business Divorce ,
Business Ownership ,
Business Valuations ,
Closely Held Businesses ,
Corporate Counsel ,
Corporate Dissolution ,
Derivative Suit ,
Family Businesses ,
Fiduciary Duty ,
First Impression ,
Limited Liability Company (LLC) ,
Minority Shareholders ,
Partnerships ,
Standing
When you think about protecting a business firm’s intellectual property (IP), usually you think about protecting it from infringement by external actors.
But there also are internal threats — even mortal ones — to the...more
7/23/2018
/ Breach of Duty ,
Business Ownership ,
Consent ,
Copyright ,
Copyright Infringement ,
Copyright Registration ,
Damages ,
Employee Inventors ,
Fiduciary Duty ,
Independent Contractors ,
Intellectual Property Protection ,
Inventors ,
IP License ,
Operating Agreements ,
Preliminary Injunctions ,
Restaurant Industry ,
Service Marks ,
Software Developers ,
TRO ,
USPTO
The Nobel Prize symbolizes the apex of human achievement in the arts and sciences. It is no guarantee, however, that its recipients are equally adept when it comes to their own business endeavors....more
The self-proclaimed entrepreneur and guiding force behind his soon-to-be ex-wife’s highly successful, multi-office pediatric dental practice known as Kiddsmiles is not smiling after the court in Savel v Savel, Short Form...more
11/6/2017
/ Article III ,
Business Litigation ,
Business Ownership ,
Constructive Trusts ,
Dental Practice ,
Dismissals ,
Divorce ,
Kickbacks ,
Limited Liability Company (LLC) ,
Partnerships ,
Standing
This is the first in what I hope will be a recurring feature of this podcast featuring war stories told by business divorce professionals. In this episode we hear stories from business appraiser Tony Cotrupe (Meliora...more
9/8/2017
/ Appraisal ,
Business Divorce ,
Business Ownership ,
Buyers ,
Buyouts ,
C-Corporation ,
Comment Period ,
Corporate Dissolution ,
Division of Assets ,
Fair Market Value ,
Forensic Examination ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Sellers ,
Valuation
Like most civil cases, the vast majority of business divorce disputes get resolved before trial, which is disappointing for us voyeurs since only at trial with live witnesses undergoing cross examination does one get the full...more
3/27/2017
/ Business Ownership ,
Dissolution ,
Estate Claims ,
Family Businesses ,
Foreclosure ,
Limited Liability Company (LLC) ,
Mortgages ,
Partnerships ,
Real Estate Market ,
Transfer of Assets ,
Wills
Oh, the things that can happen when the LLC members identified in the company’s operating agreement differ from those identified in official documents submitted to government agencies....more