The pictured architectural rendering of the sunlit Kings County Supreme Courthouse at 360 Adams Street, completed in 1957, doesn’t quite capture the reality of its dour, hulking presence in downtown Brooklyn. Its design...more
7/5/2022
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Corporate Waste ,
Derivative Suit ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Misappropriation ,
Ownership Interest ,
Shareholders ,
Standing
The current issue of The Business Lawyer, a quarterly publication of the ABA’s Business Law Section that rightly bills itself as “the premier business law journal in the country,” features a pair of dueling articles of great...more
Disputes over capital accounts and equity percentages are frequent fodder for business divorce litigation — especially in LLCs without operating agreements. Exemplars previously treated on this blog include Chiu v Chiu, an...more
6/6/2022
/ Aiding and Abetting ,
Breach of Duty ,
Business Divorce ,
Business Litigation ,
Capital Contributions ,
Equity ,
Fiduciary Duty ,
Fraud ,
Limited Liability Company (LLC) ,
Loans ,
Negligent Misrepresentation
In 2008, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery — one of the many intellectual giants and gifted writers who’ve occupied seats on that bench — published an article in the Delaware Journal of...more
This episode features an interview with Professor Meredith Miller of the Touro Law Center on her recently published article in the Indiana Law Review entitled Challenging Gender Discrimination in Closely Held Firms: The Hope...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 fair value and fair market value appraisal standards applicable in contested buyout and dissenting shareholder valuations cut across state lines, which is one of the main reasons I occasionally highlight significant court...more
4/4/2022
/ Appraisal ,
Built-In Gains ,
Business Divorce ,
Buy-Out Agreements ,
Deal Price ,
Discounts ,
Fair Market Value ,
Fair Valuation ,
IA Supreme Court ,
IN Supreme Court ,
NC Supreme Court ,
NE Supreme Court
Serving dual roles as urban homestead and non-profit business operation, residential condominiums and co-ops occupy a special niche in the arena of dispute resolution among co-owners of joint enterprises....more
The National Rifle Association has long been a politically charged topic for its fans and critics. For those of you more interested in the politics of the NRA’s ongoing battle with New York’s Attorney General Letitia James,...more
3/7/2022
/ Bad Faith ,
Bankruptcy Court ,
Business Divorce ,
Chapter 11 ,
Commercial Bankruptcy ,
Corporate Governance ,
Corporate Misconduct ,
Judicial Dissolution ,
NRA ,
State Attorneys General ,
Tax Exempt Entities
A limited partnership without a general partner cannot lawfully continue. That’s why it’s critical that the limited partnership agreement thoughtfully address general partner succession and, when triggered, the agreement’s...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
Are claims for judicial dissolution of business entities arbitrable? -
It’s a question I’m occasionally asked by business owners and, surprisingly, by lawyers. I say surprisingly because here in New York, the courts long...more
If you ask me to name the most common skirmishes over the adequacy of pleadings at the outset of business divorce litigation, at or near the top of the list are motions to dismiss a dissident owner’s direct claims that should...more
It’s been another year of important case law developments in business divorce controversies. I’m pleased to present my 14th annual list of the past year’s ten most significant cases....more
This episode features an interview with Professor Susan Pace Hamill, a leading authority and commentator on the origins and evolution of the limited liability company. We talk about her latest law review article entitled Some...more
For the second time in two years, the Connecticut Supreme Court has ventured into uncharted waters of LLC governance under the Revised Uniform LLC Act which, to date, has been adopted by 22 states and awaits legislative...more
11/22/2021
/ Books & Records ,
Business Divorce ,
Business Litigation ,
Closely Held Businesses ,
CT Supreme Court ,
Inspection Rights ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Minority Shareholders ,
RULLCA ,
Shareholder Oppression ,
Trust Distributions ,
Wealth Management
Appearances can be deceiving. -
That, essentially, was the argument made in two recently decided cases involving claims for judicial dissolution. ...more
11/15/2021
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Contract Terms ,
Employment Contract ,
Fraudulent Conveyance ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Purchase Price ,
Stock Transfer ,
Unjust Enrichment
Valuation discounts can and often do play an outsized role in contested appraisal proceedings involving the valuation of equity interests in closely held business entities for which there is no public market....more
11/1/2021
/ Appraisal ,
Business Divorce ,
Buyers ,
Buyouts ,
Closely Held Businesses ,
Dissolution ,
Fair Market Value ,
Fair Value Standard ,
Limited Liability Company (LLC) ,
RULLCA ,
Sellers
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
Who says email is more efficient and cheaper than regular mail? -
Not the manager of the McGuire family real estate business after winning a lower court ruling only to see it reversed on appeal last month in a decision...more
9/20/2021
/ Business Divorce ,
Business Litigation ,
Capital Calls ,
Contract Disputes ,
Contract Terms ,
Email ,
Family Businesses ,
Limited Liability Company (LLC) ,
Membership Interest ,
Notice Requirements ,
Operating Agreements
It’s not surprising that Vice Chancellor Zurn’s recent, first-impression decision in In re Coinmint, LLC, aligning itself with rulings in many other states including New York, found that Delaware courts lack subject matter...more
9/7/2021
/ Acquiescence ,
Bitcoin Mining ,
Business Disputes ,
Business Divorce ,
Corporate Conversions ,
Equitable Defenses ,
Estoppel ,
Foreign Entities ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Puerto Rico ,
Subject Matter Jurisdiction
Welcome to this 11th annual edition of Summer Shorts! This year’s edition features brief commentary on half a dozen business divorce cases of interest from across the country. ...more
8/30/2021
/ Business Divorce ,
Buyouts ,
Contract Terms ,
Fair Value Standard ,
Family Businesses ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Membership Interest ,
Operating Agreements ,
Shareholders
My partner Frank McRoberts recently posted about two New York cases, one involving an LLC and the other a close corporation, in which the courts resolved conflicts between, on the one hand, provision in the...more
As I wrote here, in 2016 the Manhattan-based Appellate Division, First Department decided Raharney Capital LLC v Capital Stack LLC, overruling its own precedent and joining appellate rulings by the other Departments holding...more