In this week’s New York Business Divorce, read about a rare punitive damages award in a business divorce case after a majority owner misappropriated a 25% interest in a sushi restaurant, secretly transferred the entity’s assets to another he owned, then dissolved the original, all unbeknownst to the minority owner.
Continue Reading Bad Things Can Happen When You Steal a Business from a Minority Co-Owner
In this week’s New York Business Divorce, we consider the important but rarely litigated question of whether an arbitrator has the power to extra-judicially dissolve a New York business entity.
Continue Reading Can an Arbitrator Order Extra-Judicial Dissolution?
In this week’s New York Business Divorce, a wild tale of a settlement achieved, settlement spurned, and a litigant threatened with incarceration for contempt in an intensely bitter, nine-year battle between two brothers over their Manhattan-based real property LLC.
Continue Reading A Pig in a Poke: The Rollercoaster Kadosh Settlement Litigation
This week’s New York Business Divorce offers its annual Winter Case Notes with synopses of half a dozen recent decisions in business divorce cases involving minority shareholder oppression, books and records proceedings, and more.
Continue Reading Winter Case Notes: Oppression of the “Gifted” Minority Shareholder and Other Recent Decisions of Interest
Derivative actions brought by LLC members take the spotlight for the second week in a row, this time featuring a pair of noteworthy decisions involving Delaware and Nevada LLCs in which the defendants argued that the plaintiff’s right to sue derivatively was waived by the operating agreement. Learn more in this week’s New York Business Divorce.
Continue Reading Can LLC Agreement Waive Right to Sue Derivatively? Not in These Two Cases
Is a “Management Member” of an LLC, who holds only an economic interest, a “Member” for purposes of demanding access to the LLC’s books and records? Justice Shirley Werner Kornreich, applying Delaware law, closely examined the operating agreement in upholding inspection rights, as explained in this week’s New York Business Divorce.
Continue Reading A Member By Any Other Name . . . May Have Access to LLC Books and Records
This week’s New York Business Divorce highlights a trio of recent decisions involving LLC disputes concerning the membership rights of the estate of a deceased member, the intended purpose of the LLC as the basis for a dissolution claim, and the power to expel a member.
Continue Reading LLC Case Notes: Member Expulsion, Withdrawal, and LLC Purpose
An unusual, two-state battle between 50-50 owners of a New York LLC led to a decision earlier this month by Justice Kornreich dismissing a dissolution petition and denying injunctive relief following a New Jersey judge’s order appointing a fifth Director to break a Board deadlock. This week’s New York Business Divorce has the story.
Continue Reading Court Dismisses Dissolution Petition Amidst Multi-Jurisdictional Battle for Control of LLC
“Yet another unfortunate example of a family business dispute that has developed into needless litigation” is how Justice Shirley Kornreich describes a partnership dispute pitting daughter against father and sisters. Get the story in this week’s New York Business Divorce.
Continue Reading Court Chides Parties in Family Partnership Dispute for “Needless” Litigation with “Obvious Outcome”
Traditions are good. This blog has two annual traditions. First, at the end of each year I write a post listing the year’s top ten business divorce decisions. Second, each August I offer readers who are (or ought to be) on summer vacation some light reading in the form of three, relatively short case summaries.
So here we are in what’s been a particularly felicitous August weather-wise (at least here in the Northeast U.S.), with another edition of Summer Shorts. This edition’s summaries feature two out-of-state cases — one from Florida involving expulsion of an LLC member and one from Delaware involving the valuation upon redemption of an LLC member’s interest — and a New York appellate court decision involving the removal of a limited partnership’s general partner.
Froonjian v Ultimate Combatant, LLC, No. 4D14-662 [Fla. Dist. Ct. App. May 27, 2015]. The Florida intermediate appellate court’s ruling in Froonjian makes for a fascinating contrast with New York case law represented most prominently by the Second Department’s 2010 decision in Chiu v Chiu holding that, absent express authorization in the LLC’s operating agreement, a member’s involuntary expulsion is not permitted. Going 180° in the other direction, the Froonjian court upheld the majority members’ expulsion of a minority member from a Florida LLC that had no operating agreement, reasoning that the Florida default statute vesting all decision-making authority in the members acting by majority vote encompasses the authority to expel a member.
Continue Reading Summer Shorts: Member Expulsion and Other Recent Decisions of Interest