I am increasingly encountering businesses that straddle across several different entities, especially LLCs. The popularity of LLCs, their relatively low cost of organization, and business owners’ apparent desire to...more
One of the first business divorce cases that I participated in as a young litigator was a lengthy arbitration over whether a minority shareholder was oppressed under BCL 1104-a. With those fond memories, evolution of the...more
1/13/2025
/ Arbitration ,
Board of Directors ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Contract Terms ,
Corporate Governance ,
Fiduciary Duty ,
Minority Shareholders ,
Shareholder Litigation ,
Shareholder Oppression ,
Shareholders ,
Summary Judgment
The shareholder oppression claim under BCL 1104-a has a unique relationship with claims for money damages.
A minority shareholder petitioning for dissolution under BCL 1104-a must establish that the majority shareholders...more
Just a few weeks ago, I commented on a recent uptick in disputes centered on the breakup of professional services firms. In those disputes, we expect that the demands of the legal, accounting, and medical professions draw...more
It’s not every day that New York’s highest court considers a question impacting the business divorce cases that we typically litigate. And even when an interesting business divorce issue does make its way up to Albany, it’s...more
“Under any standard of value, the true economic value of a business enterprise will equal the company’s accounting book value only by coincidence . . .” says the late business valuation expert and author Shannon Pratt. So...more
The books and records demand often is the opening act in business divorce litigation. The relatively low burden that an owner must meet in order to obtain access to a company’s books and records, and the availability of an...more
11/20/2023
/ Books & Records ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Inspection Rights ,
Limited Liability Company (LLC) ,
Membership Interest ,
Merger Clause ,
Ownership Interest ,
Shareholder Rights ,
Shareholders
The corporation of which you are a shareholder just sent you notice that it plans to merge with another corporation. And although the other existing shareholders will have their shares exchanged for shares of the new...more
MiniCorp has five shareholders, all of whom are employees. Each shareholder’s employment agreement states that they are an at-will employee of MiniCorp, and the shareholders agreement provides that when a shareholder’s...more
I previously wrote that one of the most difficult periods in the lifecycle of a closely held business is the period following the death of an owner, due to the tension between the remaining owners wishing to continue the...more
In 1941, two of the three shareholders of Ringling Bros.-Barnum & Bailey Combined Shows, Inc. entered into an agreement stating that they would vote their combined 630 of the outstanding 1000 shares of Ringling Bros. stock...more
4/10/2023
/ Board of Directors ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Contract Terms ,
Corporate Governance ,
Director Nominations ,
Limited Liability Company (LLC) ,
Private Right of Action ,
Shareholders ,
Voting Rights
Having spent the better part of my career litigating disputes between minority and majority owners of closely-held businesses, I can comfortably say that all else equal, I would prefer to be a minority shareholder of a New...more
This blog frequently covers cases considering a shareholder’s request to dissolve a corporation under New York’s oppression-based corporate dissolution statute, BCL 1104-a. That statute allows a shareholder to petition for...more
The books and records proceeding often is the first time that a dispute between a minority shareholder and the majority enters the courtroom. Suspicious of misconduct or mismanagement, the minority shareholder demands to...more
1/10/2022
/ Books & Records ,
Business Disputes ,
Business Divorce ,
Corporate Misconduct ,
Fair Valuation ,
Financial Statements ,
Inspection Rights ,
Shareholder Litigation ,
Shareholders ,
Stocks ,
Tax Returns
Business divorce has a way of drawing quick and often lopsided battle lines. Many disputes in closely-held companies feature one outspoken owner feuding with a united group of the remaining owners over management or...more
The right of shareholders to elect a corporation’s directors is one of the most valuable rights attendant to share ownership. Election of directors is where shareholders can directly exert their influence on the corporation,...more
7/26/2021
/ Board of Directors ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Closely Held Businesses ,
Corporate Governance ,
Director Nominations ,
Director Removal ,
Fine Art ,
Injunctions ,
Likelihood of Success ,
Minority Shareholders ,
Motion To Enjoin ,
Shareholder Meetings ,
Shareholders ,
Voting Rights
BCL 626 governs shareholder derivative actions, or suits brought by individual shareholders on behalf of, and for injury to, the corporation. Subsection (e) provides that if the plaintiff—the individual shareholder asserting...more
A familiar fact pattern: ParentCo is the owner and controlling shareholder of SubCo. ParentCo completely controls SubCo. The two companies have the same officers, issue consolidated financial returns, and the profits and...more