It wasn’t long ago that my partner, Peter Sluka, posted about the Andris case where the Appellate Division, Second Department, reinstated an LLC judicial dissolution proceeding brought by the estate of a deceased member....more
Some years ago, the question whether New York courts have subject matter jurisdiction over petitions to dissolve foreign business entities garnered much interest amongst business divorce lawyers and on this blog. The debate...more
It wasn’t long ago that my partner, Peter Sluka, posted about the Andris case where the Appellate Division, Second Department, reinstated an LLC judicial dissolution proceeding brought by the estate of a deceased member. ...more
The era of the old-fashioned general partnership long ago petered out, largely displaced by subchapter S corporations and, in the last few decades, limited liability companies, both of which allow pass-through taxation...more
9/23/2024
/ Business Disputes ,
Business Divorce ,
Business Litigation ,
Buy-Sell Agreements ,
Dissolution ,
Family Businesses ,
Limited Liability Company (LLC) ,
Ownership Interest ,
Partnership Agreements ,
Partnerships ,
Spouses
Welcome to this 14th annual edition of Summer Shorts. This year’s edition features brief commentary on three recent decisions by New York courts in business divorce cases. The featured cases involve a suit pitting three...more
8/12/2024
/ Bankruptcy Court ,
Bonds ,
Business Disputes ,
Business Divorce ,
Chapter 11 ,
Dissolution ,
Fair Valuation ,
Family Businesses ,
Limited Liability Company (LLC) ,
Minority Shareholders ,
Operating Agreements ,
Partnership Agreements
Delaware Chancery Court’s contractarian approach to all things LLC, embedded statutorily in Section 18-1101(b) of the Delaware LLC Act (“It is the policy of this chapter to give the maximum effect to the principle of freedom...more
Business divorce and non-judicial (a/k/a voluntary) dissolution of a business entity rarely intersect. But when they do, or even in a non-business divorce setting, if a business owner needs to rescind a certificate of...more
Count ’em: At the time A sued B for judicial dissolution of one of their several jointly owned companies, there are not one, not two, not three, but eight pending lawsuits between the two 50/50 business partners who first...more
“This case (and its many state-court siblings) has a tortured history,” is the opening line in Judge Subramanian’s decision. The “siblings” are five or so related lawsuits filed in New York State Supreme Court beginning in...more
Folks who’ve been following this blog for years know that periodically I like to venture beyond New York’s borders to find and report on interesting decisions from other states in business divorce cases....more
Last week, the Manhattan-based Appellate Division, First Department, handed down one of the more intriguing decisions by a New York court I’ve seen in a long time involving a dispute between LLC members....more
3/18/2024
/ Breach of Contract ,
Business Disputes ,
Business Divorce ,
Contract Terms ,
Entrepreneurs ,
Investment ,
Investors ,
Limited Liability Company (LLC) ,
Merger Clause ,
Operating Agreements ,
Oral Contracts
In my business divorce practice I deal with many closely held corporations that have only a few or perhaps just two shareholders, each of whom is actively involved in running the business. Within that category are many...more
Capital contributions by business owners are the lifeblood of any newly formed business entity. Typically the lifeblood consists of cash, but not always. In many instances the contribution may consist of tangible (e.g., real...more
Welcome to this year’s Winter Case Notes where, amidst the arctic blast currently sweeping most of the nation, I offer shortish takes on several court decisions in recent business divorce cases.
This year’s edition...more
Some years are easier than others to select the most significant business divorce cases. In this, the 16th year I’ve published this top-10 list, the task is made especially difficult by a veritable flood of court decisions...more
12/27/2023
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Business Ownership ,
Fiduciary Duty ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Shareholders
I recently had the privilege of speaking to an audience of judges of the New York Supreme Court Commercial Division at Fordham Law School’s Eileen Bransten Institute on Complex Commercial Litigation. Naturally, the topic was...more
New York courts are not in the vanguard when it comes to devising less drastic, alternative remedies in LLC judicial dissolution cases.
In their defense, there’s nothing in Article 7 of New York’s LLC Law that expressly...more
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
Earlier this year, using as a springboard the Maryland intermediate appellate court’s decision in Eastland Food Corp. v Mekhaya, I posted about a topic on which there’s little or no New York law, viz., whether a complaint for...more
Potential client sits down with business divorce lawyer and says, “I’m a minority shareholder in XYZ Corp. I’ve been completely frozen out by the majority. Can you help me?” The lawyer says, “Absolutely. New York law gives...more
Welcome to the 13th annual edition of Summer Shorts. This year’s edition features brief commentary on five recent decisions by New York courts in a variety of business divorce cases involving equitable contribution among...more
In the menagerie of closely held companies, those owned and controlled by 50/50 business partners pose unique benefits and challenges.
On the benefit side, co-equal ownership and control can foster cooperation,...more
It’s been many years since our last pop quiz for all you business divorce aficionados. Time for another. See how many you get right before you read the answers...more
Someday, perhaps, I’ll find the comedic inspiration to come up with a joke that begins, “An LLC, a partnership, and a close corporation walk into a bar . . ..” Until then, I’ll have to satisfy myself with writing about an...more
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