News & Analysis as of

Dissolution

Farrell Fritz, P.C.

#MeToo and Business Divorce: The Flip Side

Farrell Fritz, P.C. on

Two years ago, Peter Mahler wrote about a dissolution lawsuit by a female minority shareholder alleging that her male co-shareholders condoned a pattern of sexually offensive and demeaning conduct by a senior co-worker, which...more

Patton Sullivan Brodehl LLP

Statutory LLC Buyouts — “Fair Value” vs. “Fair Market Value”

Under section 17707.03 of California’s Revised Uniform Limited Liability Company Act, when a member sues the other members for dissolution of the LLC, the other members can exercise a statutory buyout of the suing member’s...more

Farrell Fritz, P.C.

Statutory Buyouts and Discounts Under the Fair Market Value Standard: An Awkward Pair?

Farrell Fritz, P.C. on

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

Patton Sullivan Brodehl LLP

Portrait of a Mangled Business Divorce

Business divorce can be messy, as reflected by many of the cases covered here at The LLC Jungle. Two issues that frequently arise during the dissolution of an LLC are: 1. the statutory buyout procedure, and 2. claims for...more

Farrell Fritz, P.C.

The Doctrine of Tax Estoppel in Ownership Status Disputes

Farrell Fritz, P.C. on

Ownership status in a closely-held business is the first and most vital box almost every business divorce petitioner must check....more

Morris James LLP

Chancery Finds Equitable Defenses Bar LLC Dilution and Redomestication Claims, and Holds it Lacks Jurisdiction to Dissolve a...

Morris James LLP on

In re Coinmint, LLC, C.A. No. 2019-0983-MTZ (Del. Ch. Aug. 12, 2021) - This decision illustrates that, in specific circumstances, the equitable defenses of waiver, acquiescence, and estoppel may preclude a party from...more

Allen Matkins

Why A Dissolved Corporation May Sue While A Suspended Corporation May Not

Allen Matkins on

Under the California General Corporation Law a corporation which is dissolved nevertheless continues to exist for the purpose, among others, of prosecuting actions.  Cal. Corp. Code § 2010(a).   Further, no action to which a...more

Allen Matkins

What Is A "Known Liability" And Why Does It Matter?

Allen Matkins on

My last several posts have for the most part concerned the liability of shareholders when a corporation voluntarily or involuntarily dissolves.  Directors may also face liability under Section 316(a)(2) of the Corporations...more

Allen Matkins

Actions Against Shareholders Of Dissolved Corporations (Part III)

Allen Matkins on

Today's post follows up on two prior posts addressing actions by creditors of dissolved corporations.  This post discusses the non-applicability of Chapter 5 of the California General Corporation Law to proceedings for...more

Allen Matkins

Recovering Improper Distributions From Shareholders When Winding Up The Corporation

Allen Matkins on

Yesterday's  post observed that Chapter 5 of the California General Corporation Law does not apply to proceedings for winding up and dissolution of a California corporation under either Chapter 18 (involuntary dissolutions)...more

Allen Matkins

Dissolution And Limitations On Distributions To Shareholders

Allen Matkins on

Chapter 5 of the California General Corporation Law imposes specific limitations on distributions to shareholders, as defined in Section 166.  When a corporation is wound up and dissolved, whether the dissolution is...more

Allen Matkins

What Is So Special About A "Special Proceeding"?

Allen Matkins on

Several provisions of the California General Corporation Law provide for "special proceedings" in the Superior Court.  One such provision is Section 1800 which allows certain persons to bring an action for the involuntary...more

Farrell Fritz, P.C.

Betting the Farm On An Oral Partnership Agreement

Farrell Fritz, P.C. on

The Cummins Nursery in upstate New York grows, harvests, plants, and grafts fruit trees — mainly apple trees — which along with scions and rootstocks it sells by the tens of thousands each year. There’s also a farm stand and...more

Cadwalader, Wickersham & Taft LLP

The New Normal? June 2021 - The Importance of Springing Members

Springing Members are a tool that a structured finance Lender can use to reduce the risk that a Borrower will dissolve under state law. Under most state laws, an LLC that does not have at least one member will dissolve. ...more

K&L Gates LLP

New Washington State Nonprofit Corporation Act Revitalizes Law Governing Nonprofit Corporations

K&L Gates LLP on

Effective for most purposes on 1 January 2022, a new state law overhauls and reforms the governance landscape for nonprofit corporations in the state of Washington. Replacing existing Chapter 24.03 RCW (the “Current Act”) in...more

Farrell Fritz, P.C.

To Dissolve to Not to Dissolve, that is the Question. The Answer is Both.

Farrell Fritz, P.C. on

Like the Energizer bunny, some business divorce lawsuits keep going and going and going. Years of protracted litigation, brutal though they may be upon the parties, are a bonanza for voyeuristic business divorce practitioners...more

Downey Brand LLP

No Bad Faith Required – Trustee of Spendthrift Trust May Be Compelled to Pay Attorney Fees Under Family Code Section 2030

Downey Brand LLP on

Section 2030 of California’s Family Code provides an important safeguard to ensure the fairness of marriage dissolution proceedings. It allows the Court to order a more financially well-off party to pay some or all of the...more

Morris James LLP

Court of Chancery Stays Action for Violation of Rule against Claim Splitting Pending Resolution of a Duplicative Federal Action

Morris James LLP on

Goureau v. Lemonis, C.A. No. 2020-0486-MTZ (Del. Ch. Mar. 30, 2021) Delaware follows the modern “transactional” view of claim splitting, which bars a plaintiff from bringing bring duplicative proceedings in different courts...more

Farrell Fritz, P.C.

The Money’s There But Out of Reach for the Minority LLC Member

Farrell Fritz, P.C. on

Of late I’ve been ruminating on New York’s membership in the shrinking pool of states that don’t recognize oppression of an LLC minority member by the controlling members or managers as ground for judicial dissolution....more

Allen Matkins

How To Erase A Business Entity's Cancellation

Allen Matkins on

Sometimes people get confused and will file a certificate of cancellation or dissolution with the California Secretary of State when the entity has not dissolved, much less completely wound up its affairs.  The challenge then...more

Dentons

New cause for dissolution for non-compliance with the requirements of an ongoing business

Dentons on

The following are some considerations on the new cause for dissolution due to non-compliance with the requirements of an ongoing business (ROB), its suspension and the continuity of the cause for dissolution due to losses as...more

Patterson Belknap Webb & Tyler LLP

Commercial Division Holds Corporate Directors May Be Individually Liable When Informally Dissolved Company Forgoes Notice to...

In Morse v. LoveLive TV US, Inc., a recent decision by Justice Robert R. Reed of the New York County Commercial Division, the Court denied a defendant’s motion to dismiss, holding that where it is impossible or futile to...more

Farrell Fritz, P.C.

Corporate Law Considerations in Estate Planning and Administration

Farrell Fritz, P.C. on

Introduction - This publication addresses the unintended consequences of attorneys and clients failing to consider the impact of transfers of ownership by PPP borrowers and last remaining member issues during the estate...more

Morris James LLP

Chancery Holds That a Deadlock Warranting Dissolution Can Be Genuine Even If the Circumstances Giving Rise to the Deadlock Were...

Morris James LLP on

Mehra v. Teller, C.A. No. 2019-0812-KSJM (Del. Ch. Jan. 29, 2021) - In a dispute over the validity of the dissolution of a limited liability company, the Court of Chancery held in a post-trial opinion that a deadlock...more

Farrell Fritz, P.C.

“Informal Dissolution” and Individual Liability

Farrell Fritz, P.C. on

Section 1007 of the Business Corporation Law (the “BCL”) has a procedure for dissolved corporations to publish “notice requiring all creditors and claimants . . . to present their claims in writing and in detail at a...more

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