There are many ways that an owner of a closely-held business can use their superior financial resources to gain an advantage over their co-owners in a dispute. One common way is the use of a capital call provision to dilute...more
5/31/2023
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Capital Calls ,
Closely Held Businesses ,
Covenant of Good Faith and Fair Dealing ,
Dilution ,
Fiduciary Duty ,
Minority Shareholders ,
Shareholder Oppression
When two or more people become owners of a limited liability company and embody their relationship in an operating agreement, they usually see sunshine and rainbows in their future. They have an idea, they have a corporate...more
There is arguably no more prevalent legal claim in business divorces than a claim of breach of a fiduciary duty. Simply put (and I do mean simply), when one person owes a fiduciary duty to another, the person with the duty...more
Business partnerships are built on the trust and loyalty of their participants. Without mutual coordination and honesty among all involved, tensions will inevitably arise that could derail a partnership’s success. The...more
Over the past few years, the term “receipts” has entered the pop culture lexicon to mean something broader than its traditional definition of a document that acknowledges either the receiving of a product or service, or money...more
Last month, we tackled Pennsylvania’s “universal” demand requirement. As a refresher, unlike many states, Pennsylvania will not excuse the shareholder of a company who wants the company to sue its executives or directors from...more
Attorneys that represent shareholders of publicly traded companies in securities litigation are intimately familiar with the pre-suit demand required by the corporate law of many states. ...more
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
In Pennsylvania, Manufactured Deadlocks are Unlikely to Trigger Judicial Dissolution -
In disputes among the owners of a closely held company, involuntary judicial dissolution is the nuclear option....more
When shareholders of a company believe the leaders of the company have breached their fiduciary duties to it, they can bring a lawsuit against those leaders in one of two ways. Shareholders can bring the suit in their own...more
There is perhaps no richer vein of literary gold than conflict between fathers and sons. Hamlet, Robinson Crusoe, multiple characters drawn by Charles Dickens, not to mention the mother of all family contretemps, Oedipus Rex,...more