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Business Divorce Corporate Governance

Bradley Arant Boult Cummings LLP

The Founder’s Dilemma: Stoking the Company’s Fire Without Forfeiting the Founder’s Interest in the Business

Fast-growing private companies are exciting to observe as outsiders, but on the inside the company founder has the challenge of securing enough capital to fuel the rapid growth of the business. The company’s continuous need...more

Bradley Arant Boult Cummings LLP

Resilience Required: “CRAP” Is Necessary to Blossom as the Successful Majority Owner of a Private Company

Private company owners strive for success but getting there is not an easy or straight path. I have been working closely with business owners now for more than 40 years, and I have been reflecting on the key character traits...more

Bradley Arant Boult Cummings LLP

Driving Between the Lines: As a Private Company Majority Owner, What Are the Rules for Dealing with Minority Business Partners

The one who has the gold often makes all the rules, but the majority owner of a private company who has minority partners in the business does not have complete freedom, because majority owners owe duties that apply to their...more

Farrell Fritz, P.C.

Use Caution When Amending Your Operating Agreement Without Unanimous Consent

Farrell Fritz, P.C. on

In my experience, most operating agreements of New York LLCs include a provision barring amendments unless made in writing and executed by all members. Such provisions are especially prevalent with smaller, member-managed...more

Farrell Fritz, P.C.

A Cross-Country Road Trip of Elections to Purchase in Dissolution Proceedings

Farrell Fritz, P.C. on

When a minority shareholder petitions for dissolution of a corporation on the grounds of oppressive or illegal conduct (see BCL 1104-a), Section 1118 of New York’s Business Corporation Law allows the corporation or any other...more

Farrell Fritz, P.C.

Operating Agreement Trumps Postnup in High Stakes Battle Over Transfer of LLC Interest

Farrell Fritz, P.C. on

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

Farrell Fritz, P.C.

First Department Recognizes Cause of Action for Specific Performance of LLC Member Voting Agreement

Farrell Fritz, P.C. on

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

Robson & Robson, P.C.

What Are The ALI Principles Of Corporate Governance Good For In Pennsylvania? Not Very Much.

Robson & Robson, P.C. on

The American Law Institute recently announced its plans to draft a Restatement of the Law of Corporate Governance. (https://www.ali.org/projects/show/corporate-governance/#_participants). This is ALI’s second attempt at such...more

Bradley Arant Boult Cummings LLP

After the Bubbly Is Gone: Business Resolutions for Majority Owners of Private Companies to Consider in the New Year

Following a challenging year for business owners, the time to decompress and celebrate with family and friends this holiday season provided a necessary respite. When business resumes, however, there are important action items...more

Farrell Fritz, P.C.

It’s Time to Address Sex Discrimination Against Women Owners of Closely Held Companies, Say These Two Law Professors

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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

Bradley Arant Boult Cummings LLP

The Minority Shareholder’s Arrows Are Still Sharp in the Quiver: Claims Available to Oppressed Minority Shareholders under Texas...

The seven-year anniversary of the Texas Supreme Court’s decision in Ritchie v. Rupee has come and gone, and the court’s holding from 2014 remains the law: Minority shareholders in Texas private companies do not have a cause...more

Farrell Fritz, P.C.

New York Judge Spares NRA “Corporate Death Penalty”

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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

Farrell Fritz, P.C.

Look Before You Leap: Buy-Sell Agreements Triggered by a Petition for Dissolution

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For owners of closely-held businesses, there are few provisions meriting more attention in an owners’ agreement than the buy-sell agreement.  Buy-sell agreements come in many different forms, and the best ones are designed to...more

Farrell Fritz, P.C.

Stop the Vote: Injunction Halts Shareholders Meeting Pursuant to Courts’ Broad Power to Review Corporate Elections

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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

White and Williams LLP

Breaking Up (a Business) Is Hard to Do: How to Plan Ahead to Ease the Pain

In business, as in marriage, financial problems put stress on a relationship and are a common cause of divorce. No business divorce is easy, but partners who have ahead of time vetted governance, dispute resolution,...more

White and Williams LLP

Delaware Chancery Court Relies Upon Judicial Dissolution Power to Break Management Deadlock

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Shareholder agreements and operating agreements contain a variety of knobs and levers, many of which a company’s founders hope never to invoke. Chief among them are the provisions for resolving disputes or deadlocks in...more

Farrell Fritz, P.C.

Business Divorce Epilogues

Farrell Fritz, P.C. on

Over the years I’ve blogged about hundreds of court decisions in business divorce cases. Believe it or not, one of the things I like to do is track the cases I’ve written about...more

Farrell Fritz, P.C.

Think Twice Before Putting 100% Quorum Requirement in By-Laws or LLC Agreement

Farrell Fritz, P.C. on

It’s no surprise that the quorum requirements found in close corporation by-laws and LLC operating agreements rarely step into the limelight in business divorce disputes....more

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