It seems a bit exaggerated to liken the deterioration of a relationship between 50/50 business partners to a fatal disease, but in the case of Pathology Associates of Ithaca, P.C., recently pronounced dead by act of judicial dissolution, the comparison may be apt.
The story of Pathology Associate’s demise seems to be more about a clash of personalities than about the usual disputes over money, side dealing, freeloading, and succession plans. The lower court’s post-trial decision granting dissolution, recently affirmed on appeal, mentions the “mentor/mentee” and “healthy functional” relationships that existed between the two pathologists-shareholders — whom I’ll refer to as Dr. P and Dr. S — from the time Dr. P joined the more senior Dr. S’s practice as an employee in 2013. The working relationship blossomed in 2018 when Dr. S granted Dr. P a 50% interest in the practice. Yet within two short years, under the stress of new demands on the practice occasioned in large part by the COVID pandemic, the two doctors landed in court as adversaries when Dr. P sued in Tompkins County Supreme Court for judicial dissolution, claiming dissension and deadlock under Section 1104 of New York’s Business Corporation Law.Continue Reading The Pathology of Deadlock Dissolution