I’ve lost track of how many lawsuits I’ve seen between co-owners of New York City restaurants. It’s not surprising given the high percentage of restaurant failures in an intensely competitive market with high rents, high...more
12/2/2019
/ Books & Records ,
Business Assets ,
Business Litigation ,
Commercial Court ,
Contract Terms ,
Dismissals ,
Fraud Abuse and Waste ,
Intellectual Property Protection ,
IP License ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Partnerships ,
Professional Misconduct ,
Restaurant Industry ,
Theft ,
Trademarks
In 2018, two members of a realty holding LLC sought judicial dissolution based on the death of one of the other members. The operating agreement defines a member’s death as an event of “Dissociation.”...more
11/18/2019
/ Appeals ,
Business Divorce ,
Business Litigation ,
Contract Disputes ,
Contract Negotiations ,
Contract Terms ,
Decedent Protection ,
Dismissals ,
Dissolution ,
Inheritance ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Property Valuation ,
Real Estate Market ,
Rental Property
330 West 85th Street is a prime location on Manhattan’s Upper West Side. At that address sits an elegant, pre-war, 48-unit rental apartment building known as The Rexmere. A 4th floor one-bedroom apartment currently is...more
Here we go again — and again and again.
On numerous prior occasions I’ve written about judicial dissolution cases and other infighting among LLC members featuring disputes over membership percentages. ...more
The nationwide landscape of statutes and case law governing judicial dissolution of limited liability companies exhibits more state-to-state similarity than dissimilarity....more
9/23/2019
/ Business Divorce ,
Business Litigation ,
Buyouts ,
Capital Contributions ,
Contract Terms ,
Corporate Purpose ,
Dissolution ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Sale of Assets ,
Statutory Interpretation
Parking lots breed partnership disputes. I’ve litigated them and I’ve written about them, most notably the Kassab saga.
I suppose it’s the untapped development potential of parking lots, especially in flourishing downtown...more
What makes someone a member of an LLC?
It’s a question that frequently arises in business divorce cases involving LLCs that have no written operating agreement much less certificated membership interests. ...more
LLC enabling statutes authorize two types of management structures. The default structure is member-managed in which all members participate in the management of the company’s business affairs. Member-managed LLCs usually...more
Many thousands of closely held corporations, limited liability companies, and limited partnerships formed under Delaware law (and, to a much lesser extent, other foreign states) make their home in New York....more
The limited liability company did not exist as a legally recognized business entity in New York when I first began handling business divorce cases in the 1980s. Decades later, the LLC is “King of the Hill,” having displaced...more
It’s commonly said there are three things that matter with real estate: location, location, location. Likewise, three things matter when choosing a lawyer to set up a limited liability company: experience,...more
6/18/2019
/ Agribusiness ,
Business Divorce ,
Business Formation ,
Business Litigation ,
Business Partners ,
Dissolution ,
Family Businesses ,
Farms ,
K-1 ,
Legal Representatives ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Transfer of Interest
If you’re a member of a multi-member LLC, and especially if it’s manager-managed, here’s a reason you might want to check under the hood of your LLC agreement: if the business goes belly up amidst squabbling or worse among...more
Tax issues always have been an integral factor in valuing closely held business entities, whether for purposes of a court-supervised buyout or otherwise. The Tax Reform Act of 2018 added an important, new deduction for...more
Most judicial dissolution cases in New York courts involve a single entity. When the target of dissolution is structured as a holding company for one or more operating or asset-based companies with asymmetric management, the...more
Before we get to the case: A fixed price buy-sell agreement is one in which co-owners of a business select a specific dollar amount, expressed either as enterprise or per-share value, for calculation of the future buyout...more
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
Let me say up front, I don’t claim to know the answer to the question posed in this post’s title, or pretend there’s a simple yes-or-no answer....more
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
Consider the following hypothetical: The operating agreement of an LLC vests management authority in its two members. ...more
Much digital ink has been spilled on this blog and elsewhere (Tom Rutledge’s terrific article can be read) concerning the ability of LLC controllers to adopt or amend an operating agreement without the consent of all members....more
What’s a weaponized LLC? It’s one whose operating agreement gives the controlling majority members the authority to dilute, remove from management, or expel a non-controlling minority member, typically for failing to satisfy...more
C’mon, New York lawyers, do you really want to spend your time, your client’s money, and bother the court litigating a dead-end claim that your client rightfully expelled his or her LLC co-member for alleged misconduct,...more
Very few and very far between are cases in which the holder of a minority membership interest in a New York LLC — with or without a written operating agreement — prevails in an action brought under section 702 of the New York...more
When you think about protecting a business firm’s intellectual property (IP), usually you think about protecting it from infringement by external actors.
But there also are internal threats — even mortal ones — to the...more
7/23/2018
/ Breach of Duty ,
Business Ownership ,
Consent ,
Copyright ,
Copyright Infringement ,
Copyright Registration ,
Damages ,
Employee Inventors ,
Fiduciary Duty ,
Independent Contractors ,
Intellectual Property Protection ,
Inventors ,
IP License ,
Operating Agreements ,
Preliminary Injunctions ,
Restaurant Industry ,
Service Marks ,
Software Developers ,
TRO ,
USPTO
Three recent court decisions from three different states — New York, Pennsylvania, and Alabama — add to the rogue’s gallery of valuation cases stemming from poorly conceived and/or poorly implemented buy-sell agreements among...more
7/2/2018
/ AL Supreme Court ,
Asset Valuations ,
Business Divorce ,
Buy-Sell Agreements ,
Buyouts ,
Contract Terms ,
Fair Value Standard ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Shareholders