Williams Mullen Mezzanine Lending Video Series - Episode 4
Episode 021: Member Liquidity, Default Rules, and the Corporate-ization of LLCs: A Conversation with Dean Donald J. Weidner
“It all started when the distributions stopped.” In my travels as a business divorce litigator, I’ve seen many disputes between LLC co-owners that begin with that message. A minority owner is content to remain a “silent...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
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
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
Last month, in Flor v Greenberg Farrow Architectural Inc., a three-judge panel of the New Jersey Appellate Division handed down an opinion with important lessons for business owners and practitioners in states that have...more
From early-stage startups to seasoned enterprises, businesses eventually form at least one legal entity to carry out their operations. Down the road, as opportunities arise for a business to expand, acquire others, merge, or...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
Limited Liability Companies (LLCs) are a common business structure. Combining the best elements of corporations and partnerships, LLCs offer liability protection while maintaining operational flexibility....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
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
One of the most difficult periods in the lifecycle of a closely-held company is the period following the death of an owner. Apart from having to fill whatever business responsibilities the deceased owner left behind, the...more
I’m delighted to present our 15th annual list of the past year’s ten most significant business divorce cases. This year’s list includes decisions by New York’s trial and appellate courts concerning a smorgasbord of...more
The members of Nite Cap’s owner, Bull-Poet, LLC, recently traded the full sheets and gentle seas of the Hudson for the strum and drang of litigation in New York’s Supreme Court. But the squall has passed; thanks to New York...more
In a recent decision by the Tenth Circuit Bankruptcy Appellate Panel, the court held that a chapter 7 trustee could not sell an LLC membership interest pursuant to section 363 of the Bankruptcy Code because of a transfer...more
Let’s see how good you are at predicting the outcome and its rationale in a recently decided case involving the following facts: The controller of a Delaware LLC has supermajority voting rights under the initial LLC...more
New York’s default rules regarding LLC members’ rights to transfer their interests appear in sections 603 and 604 of the LLC Law. Section 603 provides that a membership interest is fully assignable, but the assignee does not...more
Limited liability companies (LLC or LLCs) are an attractive choice of entity for many non-public companies. An LLC is the preferred choice of entity for many advisors, including me, unless the facts warrant something...more
The emergence of the Limited Liability Company as the preferred form of closely-held business association in New York has spawned a glut of litigation over disputed membership status in LLCs, many of which are covered in the...more
In the fourth episode of Williams Mullen's Mezzanine Lending video series, corporate attorneys Bob Dewar and Randal Greene discuss the primary challenges of mezzanine loans for borrowers....more
The New York Times yesterday published an article entitled Climate Change Enters the Therapy Room discussing persons suffering from “climate anxiety.” As a northeasterner, the frigid, snow-blessed, ground-freezing winter...more
“Except as provided in the operating agreement. . . ” - By my count, this phrase and its close relative, “unless otherwise provided in the operating agreement,” appear 59 times in New York’s LLC Law, most often to...more
Appearances can be deceiving. - That, essentially, was the argument made in two recently decided cases involving claims for judicial dissolution. ...more
The harried realities of modern life are such that business entity organizational documents, like LLC operating agreements, sometimes do not get drafted or executed until long after the entity’s initial formation with the...more
We often cover preliminary injunctions on the pages of this blog because they are a powerful tool in the business divorce litigator’s toolbox: they force court action early in the case, they can protect rights that are...more