In the last two years, fueled by a series of high profile cases involving media executives, entertainers, and other public figures, #MeToo has gained worldwide recognition as a symbol of the burgeoning movement against sexual...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
I’m very pleased to present my 11th annual list of this past year’s ten most significant business divorce cases.
This year’s list includes four important appellate decisions, including one likely to stand as a landmark...more
12/31/2018
/ Appeals ,
Article III ,
Breach of Duty ,
Business Divorce ,
Business Ownership ,
Business Valuations ,
Closely Held Businesses ,
Corporate Counsel ,
Corporate Dissolution ,
Derivative Suit ,
Family Businesses ,
Fiduciary Duty ,
First Impression ,
Limited Liability Company (LLC) ,
Minority Shareholders ,
Partnerships ,
Standing
Raise your hand if you think that a lawsuit for an accounting by the managers of an LLC simply means they have to turn over financial records.
...more
After two years, 300+ docket entries, and 12 motions, a lawsuit among members of a Delaware LLC that owned a 5-story apartment building on Manhattan’s Upper East Side (the “UES Building”) acquired to provide short-term...more
12/10/2018
/ AirBnB ,
Article III ,
Books & Records ,
Breach of Duty ,
Commercial Court ,
Fiduciary Duty ,
Leave to Amend ,
Limited Liability Company (LLC) ,
Rental Property ,
Short-Term Lease ,
Standing ,
Subject Matter Jurisdiction ,
Vacation Rentals
Last month gave us three noteworthy post-trial decisions in three different cases from three different states, all centering on disputes among business co-owners over the ownership and exploitation of the businesses’s core...more
12/3/2018
/ Business Divorce ,
Copyright ,
Corporate Dissolution ,
Derivative Suit ,
Family Businesses ,
Infringement ,
Intellectual Property Protection ,
IP License ,
License Agreements ,
Limited Liability Company (LLC) ,
Patents ,
Shareholders ,
Trademarks
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
When a minority shareholder petitions for judicial dissolution under § 1104-a of the Business Corporation Law based on the majority’s alleged oppressive conduct, looting, waste, or diversion of corporate assets, BCL § 1118...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
In the judicial dissolution case that John (“Jake”) Feldmeier brought after resigning as the highly paid president of the family-owned business, the central issue over which he and his opposing siblings fought was whether the...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
The dog days of August are upon us, a perfect time as I do each year to offer vacationing readers some lighter fare consisting of summaries of a few recent decisions of interest involving disputes between business co-owners....more
8/13/2018
/ Appraisal ,
Business Divorce ,
Business Litigation ,
Business Valuations ,
Buy-Out Agreements ,
Co-Ownership ,
Contract Disputes ,
Contract Terms ,
Judicial Dissolution ,
Jurisdiction ,
NE Supreme Court ,
Partnership Agreements ,
Partnership Interests ,
Partnerships ,
Profit Sharing ,
Shareholders
Shareholders A and B are the sole shareholders of a real estate holding corporation. Their shareholders’ agreement includes provisions that...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
When three gentlemen in their mid-eighties, one of whom is in a nursing home with failing health and onset dementia, are the key players in a disputed shareholder buy-out transaction, what are the odds they’ll all be around...more
7/16/2018
/ Appeals ,
Breach of Duty ,
Business Divorce ,
Buy-Out Agreements ,
Fair Market Value ,
Fiduciary Duty ,
Fraudulent Concealment ,
Motion for Reconsideration ,
Motion to Dismiss ,
Partnership Interests ,
Partnerships ,
Real Estate Investments ,
Shareholder Litigation ,
Shareholders ,
Stock Sale Agreements ,
Stock Transfer ,
Summary Judgment
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
The hard-fought business divorce litigation between Nissim Kassab and his brother Avraham has provided plenty of fodder for this blog over the last several years with more to come, as evidenced by Queens County Supreme Court...more
Article 11 of the Business Corporation Law features multiple provisions giving judges broad authority and discretion to impose interim remedies designed to preserve corporate assets and otherwise to protect the petitioning...more
The Lowbet Realty saga, featuring the dissolution court’s rarely used authority to rescind an unauthorized sale of the corporation’s realty under Business Corporation Law § 1114, has finally ended after six years with a...more
Mediation, as commonly understood in the context of alternative dispute resolution, employs a neutral third party to facilitate negotiation and voluntary agreement between the parties. Unlike arbitration, the mediator does...more