The practical lesson for entrepreneurs of the case I’m about to describe is, never sign complex business agreements without your lawyer, and never ever sign such agreements in the last week of August when your vacationing...more
This is the first in what I hope will be a recurring feature of this podcast featuring war stories told by business divorce professionals. In this episode we hear stories from business appraiser Tony Cotrupe (Meliora...more
9/8/2017
/ Appraisal ,
Business Divorce ,
Business Ownership ,
Buyers ,
Buyouts ,
C-Corporation ,
Comment Period ,
Corporate Dissolution ,
Division of Assets ,
Fair Market Value ,
Forensic Examination ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Sellers ,
Valuation
As many judges and lawyers know, Superstorm Sandy has been used in litigation over the years as an excuse for things ranging from the seriously bad, like destroyed evidence, to the more mundane, like blown court deadlines. In...more
Regular readers of this blog know it’s been anything but summer doldrums in the world of business divorce, what with case law developments such as the Appellate Division’s potentially far-reaching ruling on the purposeless...more
WARNING: Contractarians may find the following post disturbing. Reader discretion is advised.
Now that I’ve got your attention, consider this:
Under the standard for judicial dissolution of a New York LLC prescribed in...more
Over the years I’ve litigated and observed countless cases of alleged oppression of minority shareholders by the majority. Oppression can take endlessly different forms, some more crude than others in their execution, some...more
Board members’ decisions to award compensation packages for themselves can present some thorny issues. In a close corporation, shareholders typically serve as officers and directors, and have a reasonable expectation of...more
The third time definitely wasn’t a charm for the plaintiff in Austin v Gould, 2017 NY Slip Op 31494(U) [Sup Ct NY County July 13, 2017], in which the court dismissed ill-pleaded claims for “unfettered and unlimited access to...more
In 1981, three partners formed a general partnership to own and operate a rental property. Their partnership agreement fixed a 30-year term, to 2011. In 2003, the partners formed a new LLC maintaining the same ownership...more
During her many years as Presiding Justice of the Brooklyn Commercial Division, New York Supreme Court Justice Carolyn E. Demarest (Ret.) decided some of the most important and challenging business divorce matters including...more
A business’s failure to pay state taxes can be a problem if the entity later wants to bring a lawsuit, or its non-controlling owners want to sue on the entity’s behalf....more
Pay attention to your K-1s or they may come back to bite you, is the lesson of Bruder v Hillman, Docket No. A-5055-15T1 [N.J. Super. Ct. App. Div. June 27, 2017], decided last week by a New Jersey appellate panel which...more
The title of this post notwithstanding, the judge’s decision in the recent, high-stakes stock valuation case I’m about to describe, featuring a clash of business appraiser titans whose conclusions of value differed by almost...more
A company has four founding shareholders each of whom is a director-employee. Their agreement provides that the votes of three out of four founders are required to terminate the employment of any founder or to approve a...more
Civil litigation in federal court can be a luxury experience. The quality of the judiciary is superb. Federal judges often give their cases substantial individualized attention. Lawsuits progress relatively quickly. The...more
At first glance, you might think the plaintiff minority shareholder in Sardis v Sardis, 2017 NY Slip Op 27163 [Sup Ct Suffolk County May 11, 2017], achieved her derivative lawsuit’s goal when the defendant controlling...more
A little over three years ago I reported on the first round of a fascinating “food fight” among four siblings, each of whom is a 25% shareholder of a Brooklyn-based, second-generation food distributor known as Jersey Lynne...more
The common perception among practitioners familiar with the business entity laws of New York and Delaware is that Delaware law generally is friendlier to, and more protective of, majority ownership and management interests....more
The rules of “standing” in business divorce litigation generally require that the plaintiff have an ownership interest in the business entity at the time of the alleged wrongful conduct and, for derivative claims brought on...more
At least on paper, shotgun provisions in shareholder and operating agreements provide an elegant and efficient buy-out solution when business owners can’t get along and need a divorce. In a two-owner company, the one who...more
The U.S. reportedly has the world’s highest number of lawyers per capita (1 for every 300 people) and the 5th highest number of lawsuits per capita (74.5 for every 1,000 people, topped only by Germany, Sweden, Israel, and...more
Forensics means different things to different people in different contexts. But what does it mean in the context of valuing equity interests in closely held business entities? You’ll learn the answer – and a lot more – in...more
Article 11 of the Business Corporation Law governs dissolution of closely held New York business corporations. Article 11 has existed, more or less in its current form, for decades. Some of its provisions have been heavily...more
4/17/2017
/ Breach of Contract ,
Breach of Duty ,
Buy-Out Agreements ,
Corporate Dissolution ,
Fiduciary Duty ,
Fraud ,
Minority Shareholders ,
Shareholder Litigation ,
Shareholders ,
Tortious Interference ,
Unjust Enrichment
It’s true that the statutory and common-law rules at play in business divorce cases can vary widely from state to state. But it’s also true that court decisions in one state can influence courts in other states, and can...more
The premiere episode of Business Divorce Roundtable starts out with a bang or, more accurately, Part One of a two-part interview with one of the nation’s leading business appraisers, Chris Mercer, discussing the controversy...more