Usually I open my annual Summer Shorts post with some breezy comment about summer vacations, travel, or poolside reading. But this shelter-at-home year we find ourselves living and working in profoundly different...more
New York’s Business Corporation Law (BCL) provides three pathways for non-controlling shareholders to achieve involuntary (judicial) dissolution. ...more
Some years ago I had the good fortune to join the ABA Business Law Section’s Committee on LLCs, Partnerships and Unincorporated Entities which, among its other scholarly pursuits in the field of alternative entities,...more
I’ve represented clients on both sides of freeze-out mergers of privately owned business entities, so I’m very familiar with their uses, misuses, potential advantages, and potential disadvantages to both freeze-ors and...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
FGLS Equity LLC was one of many feeder funds caught up in the maelstrom that followed the exposure and meltdown in 2008 of the Bernie Madoff Ponzi scheme. It lost virtually all of its money in its account with Bernard L....more
As regular readers of the blog surely are aware, there are few provisions in an LLC or shareholders agreement more likely to be the focus of dispute than the buy-sell provision. Most times, these disputes expose a flaw in the...more
The COVID-19 pandemic kept New York’s courthouses dark the last few months, but it didn’t slow down the output of decisions by Commercial Division judges. If anything, the pause of new case filings and non-emergency motions...more
Was it “an unfortunate attempt to second-guess or even force a ‘do over’ of the appraisal,” as the one side would have it? Or was it a “rigged” and “corrupted” appraisal process that took place behind closed doors and...more
Three shareholders co-own an 8-year old internet-based “marketeer” business that imports Chinese-manufactured sinks, faucets, and related plumbing fixtures that it sells primarily to distributors and retailers in the United...more
This episode features a lively interview with Donald J. Weidner, Dean Emeritus of the Florida State University College of Law and one of the leading authorities in the country on partnerships and LLCs. Don’s latest article,...more
If you read most any operating agreement for a manager-managed LLC, chances are you’ll find somewhere in it a grant of decision-making authority in the manager’s “sole and absolute discretion” or verbiage to similar effect....more
Two of my pet topics — dysfunctional buy-sell agreements and application of federal court abstention doctrine in private company disputes — intersect in a decision issued last month in Ray v Raj Bedi Revocable Trust, Case No....more
LLC enabling legislation swept the country in the late 1980s through the mid 1990s. By the turn of the century we saw a trickle of litigation working its way through the courts involving disputes among LLC co-owners. A decade...more
April 07, 2020 As guidance continues to evolve, the Treasury Department has set up a Frequently Asked Questions (“FAQs”) page on their website. This addition allows the SBA and Treasury to provide timely additional guidance...more
The proverb “All for the want of a horseshoe nail” aptly describes the possibly mortal blow dealt by the Appellate Division’s recent decision in Favourite Ltd. v Cico, 2020 NY Slip Op 01463 [1st Dept Mar. 3, 2020], to a...more
The Comic Strip is the oldest stand-up comedy showcase club in New York City. Its co-founders Robert Wachs and Richard Tienken opened the club in 1975 on Manhattan’s Upper East Side....more
I’m always disappointed by appellate opinions that decide novel or unsettled issues in business divorce cases with little or no analysis. It seems like a lost opportunity to provide guidance in future cases....more
Article 12 of New York’s Limited Liability Company Law authorizes the formation of professional service limited liability companies (PLLC). Eligible professions include lawyers, medical doctors, accountants, architects, and...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
Welcome to this year’s edition of Winter Case Notes in which I highlight a collection of recent court decisions of interest to business divorce aficionados by way of brief synopses with links to the decisions for those who...more
2/24/2020
/ Appeals ,
Article III ,
Business Divorce ,
Business Litigation ,
Corporate Dissolution ,
Demand Futility ,
Derivative Suit ,
Shareholder Demands ,
Shareholder Litigation ,
Standing ,
Statute of Limitations ,
Time-Barred Claims
I’ve yet to see him make a court appearance, and hope I never do, but the Grim Reaper sure has a knack for disrupting business divorce litigation involving LLCs and limited partnerships....more
2/10/2020
/ Assignments ,
Automatic Stay ,
Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Commercial Court ,
Controlling Person ,
Decedent Protection ,
Derivative Suit ,
Dissolution ,
Family Businesses ,
Fiduciary Duty ,
Fraud ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Ownership Interest ,
Partnership Interests ,
Partnerships ,
Real Estate Market ,
Statutory Interpretation ,
Transfer of Control ,
Unfair Dealing
The case of Shapiro v Ettenson ranks as one of the more consequential ones in the realm of New York’s LLC jurisprudence....more
2/4/2020
/ Arbitration ,
Bad Faith ,
Breach of Contract ,
Business Divorce ,
Business Litigation ,
Capital Calls ,
Contract Disputes ,
Contract Terms ,
Damages ,
Expulsion ,
Limited Liability Company (LLC) ,
Member Removal ,
Membership Interest ,
Operating Agreements
I was especially drawn to the case I’m about to introduce involving LLC member withdrawal, owing to the Jacobs v Cartalemi case that I litigated to a successful conclusion about two years ago, also involving member...more
1/27/2020
/ Breach of Contract ,
Business Divorce ,
Buyouts ,
Commercial Property Owners ,
Default ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Members ,
Membership Interest ,
Motion to Dismiss ,
Operating Agreements ,
Right of First Refusal ,
Withdrawal
Not for the first time, I find myself intrigued by the federal courts’ resistance to hearing state law claims for judicial dissolution of business entities where subject matter jurisdiction otherwise exists based on diversity...more
1/13/2020
/ Breach of Duty ,
Business Divorce ,
Business Entities ,
Business Litigation ,
Commercial Court ,
Commercial Leases ,
Common Law Claims ,
Contract Renewal ,
Damages ,
Derivative Suit ,
Dissolution ,
Fiduciary Duty ,
First Impression ,
Holding Companies ,
Investment ,
Judicial Dissolution ,
Nonprofits ,
Shareholder Litigation ,
Shareholder Rights ,
Shareholders ,
State Law Claims ,
Statutory Interpretation ,
Statutory Violations ,
Subject Matter Jurisdiction ,
Unjust Enrichment