2008

Professional service corporations are “interesting” and “strange creatures”, says Justice Ira B. Warshawsky in a recent decision rejecting a claim for statutory buyout in a suit brought by a terminated partner in a law firm organized as a professional corporation. Get the story in this week’s New York Business Divorce.
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Continue Reading Terminated Member of Professional Corporation is Not Entitled to Statutory Stock Redemption

When it comes to rulings by its Court of Chancery, what happens in Delaware definitely does not stay in Delaware. This week’s New York Business Divorce looks at a recent decision by that important court, dismissing a petition for judicial dissolution of a Delaware LLC.
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Continue Reading Delaware Court of Chancery Narrowly Construes LLC Dissolution Statute

When company co-owners fight, “Duck for cover!” may be the best advice for the company’s outside accountant. In this week’s New York Business Divorce, read about a CPA firm that got caught in the crossfire of a dissolution contest and ended up having to defend itself against allegations of improper partisanship.
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Continue Reading Certified Partisan Accountant? Court Allows LLC Member’s Suit Against Company’s CPA, Alleging Improper Assistance to Other Member in Judicial Dissolution Proceeding

The Court of Appeals in Tzolis v. Wolff authorized derivative suits on behalf of LLCs. This week’s New York Business Divorce looks at two post-Tzolis lower court decisions addressing pre-action demand and contemporaneous ownership requirements for such suits.
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Continue Reading Post-Tzolis Rulings Address Demand and Contemporaneous Ownership Requirements for LLC Derivative Actions

When husband and wife hold shares as joint tenants with right of survivorship, can one of them seek corporate dissolution without joining the other? Get the answer in this week’s New York Business Divorce.
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Continue Reading Spouses Holding Shares as Joint Tenants Must Jointly Petition for Corporate Dissolution

It’s the perfect LLC storm: Accusations by the minority member of overreaching and breach of fiduciary duty by the controlling members, no operating agreement, and an LLC statute that affords neither party a judicial means of achieving the separation they each want. Read about it in this week’s New York Business Divorce.
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Continue Reading A Case of Mutual Frustration: Minority Member of LLC Can’t Compel Dissolution, Majority Can’t Compel Buyout

Matter of Youngwall, in which Justice Stephen Bucaria last March dissolved an unprofitable LLC owned by two brothers, makes another appearance in this week’s New York Business Divorce, this time focusing on the court’s recent decision denying a motion for reconsideration.
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Continue Reading Further Thoughts on Youngwall and Judicial Dissolution of the Unprofitable LLC

Two courts, one in Delaware and the other in New York, are asked to enforce operating agreements waiving the right to seek judicial dissolution of an LLC. Only one of them says “yes.” Can you guess which one? Get the answer in this week’s New York Business Divorce.
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Continue Reading WWDD (What Would Delaware Do) With an In Terrorem LLC Dissolution Waiver Clause?

This week’s New York Business Divorce looks at a recent decision by Justice Herman Cahn addressing the fiduciary duties of a controlling shareholder who authorizes and issues additional shares to himself without offering the same opportunity to minority shareholders.
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Continue Reading Controlling Shareholder’s Dilution of Minority Interest Requires Bona Fide Business Purpose