At first glance, you might think the plaintiff minority shareholder in Sardis v Sardis, 2017 NY Slip Op 27163 [Sup Ct Suffolk County May 11, 2017], achieved her derivative lawsuit’s goal when the defendant controlling...more
A little over three years ago I reported on the first round of a fascinating “food fight” among four siblings, each of whom is a 25% shareholder of a Brooklyn-based, second-generation food distributor known as Jersey Lynne...more
The common perception among practitioners familiar with the business entity laws of New York and Delaware is that Delaware law generally is friendlier to, and more protective of, majority ownership and management interests....more
The rules of “standing” in business divorce litigation generally require that the plaintiff have an ownership interest in the business entity at the time of the alleged wrongful conduct and, for derivative claims brought on...more
At least on paper, shotgun provisions in shareholder and operating agreements provide an elegant and efficient buy-out solution when business owners can’t get along and need a divorce. In a two-owner company, the one who...more
The U.S. reportedly has the world’s highest number of lawyers per capita (1 for every 300 people) and the 5th highest number of lawsuits per capita (74.5 for every 1,000 people, topped only by Germany, Sweden, Israel, and...more
Forensics means different things to different people in different contexts. But what does it mean in the context of valuing equity interests in closely held business entities? You’ll learn the answer – and a lot more – in...more
Article 11 of the Business Corporation Law governs dissolution of closely held New York business corporations. Article 11 has existed, more or less in its current form, for decades. Some of its provisions have been heavily...more
4/17/2017
/ Breach of Contract ,
Breach of Duty ,
Buy-Out Agreements ,
Corporate Dissolution ,
Fiduciary Duty ,
Fraud ,
Minority Shareholders ,
Shareholder Litigation ,
Shareholders ,
Tortious Interference ,
Unjust Enrichment
It’s true that the statutory and common-law rules at play in business divorce cases can vary widely from state to state. But it’s also true that court decisions in one state can influence courts in other states, and can...more
The premiere episode of Business Divorce Roundtable starts out with a bang or, more accurately, Part One of a two-part interview with one of the nation’s leading business appraisers, Chris Mercer, discussing the controversy...more
If you haven't already listened to Episode 1/Part 1 of my interview with Chris Mercer, in which Chris discusses the fundamentals of the controversy surrounding application of the marketability discount in statutory fair value...more
In this episode, Prof. Peter Molk of the Willamette University College of Law discusses his groundbreaking study and forthcoming law review article on how LLC owners draft their agreements to strengthen or weaken the owner...more
A huge percentage of limited liability companies consist of two co-equal, 50% members, which poses the danger of management deadlock and dysfunction leading to dissolution or other litigation. In this episode, you'll hear my...more
The Chancery Court of Delaware is considered by many to be the most influential U.S. court when it comes to business law, mostly due to that state's dominant role as the preferred state of incorporation of publicly held...more
I can count on one hand the number of federal court cases I’ve featured on this blog since I started it almost 10 years ago — and that’s no coincidence....more
Expulsion a/k/a dissociation of an LLC member is a hot-button topic whether it’s pursuant to the terms of an operating agreement or by court order. This episode of the Business Divorce Roundtable features an interview with...more
As many litigators will tell you, “business divorce on steroids” aptly describes the tenor of litigation that can erupt when members of a family-owned business have a falling out. No one has devoted more scholarship to the...more
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
The combination of majority rule and lack of exit rights leaves minority members of LLCs vulnerable to oppressive conduct by the majority, yet unlike legislation in most states giving dissolution and buy-out remedies to...more
A business divorce within a marital divorce presents challenges that tax the skills of even the most experienced business lawyers. Dallas attorney Ladd Hirsch, a litigation partner at Diamond McCarthy LLP, has developed a...more
When a romantic affair evolves into a business relationship, the eventual falling out can be especially messy. Even more so if the former lovers try to keep the business going after the romance ends. That is a theme from a...more
The marketability discount as applied in New York fair value proceedings remains a hot topic in business valuation and legal circles. In this episode, I interview business appraiser Greg Barber of Barber Analytics who...more
Whenever I contemplate New York’s unusual case law on the discount for lack of marketability (DLOM) in statutory fair value buy-out proceedings, I cast my eyes westward, to the far banks of the Hudson River, and take comfort...more
Mediation has grown in popularity as a means of resolving legal disputes in lockstep with the rising costs and delays attendant to litigation and arbitration, including business divorce cases. This episode features an...more
Mediation continues to grow in popularity as a means of resolving legal disputes in lockstep with the rising costs and delays attendant to litigation and arbitration. Mediation allows the parties to air their grievances...more