I’m pleased to present the second annual list of my selections for the year completed’s top-10 business divorce cases — a dubious honor at best for the litigants involved, but no less titillating for the rest of us voyeurs (although one of the cases, Ravitz, I handled). Half of this year’s crop concerns issues arising out of LLC disputes, which is consistent with the growing importance of the LLC as the business form of choice for closely held firms. All of these cases were featured in this blog previously; click on the case name to read the full treatment. And the winners are:
- Gottlieb v. Northriver Trading Co., LLC, 58 AD3d 550 (1st Dept 2009), in which the court recognized a common law right of LLC members to seek an equitable accounting remedy.
- Matter of Verdeschi, 63 AD3d 1084 (2d Dept 2009), in which the court ruled that the majority shareholders of an accounting firm were liable for the value of the deceased minority shareholder’s interest after they formed a new firm using the old firm’s assets and good will.
- Yemini v. Goldberg, 60 AD3d 935 (2d Dept 2009), in which the court enforced stock ownership rights as reflected in a nominee agreement notwithstanding allegations of unclean hands relating to the concealment of the stock interest.
- Matter of Ravitz, 65 AD3d 1049 (2d Dept 2009), holding that the court lacks authority to conduct an appraisal of good will value in post-dissolution proceedings arising from a deadlock petition under BCL Section 1104.
- Caplash v. Rochester Oral & Maxillofacial Surgery Associates, LLC, 63 AD3d 1683 (4th Dept 2009), in which the court held that a 50% LLC member lacked authority to hire company counsel to accept the other member’s resignation.
- Cooperstown Capital, LLC v. Patton, 60 AD3d 1251 (3d Dept 2009), in which the court invalidated a selective capital call that violated the operating agreement’s provision for pro rata contributions.
- Fuiaxis v. 111 Huron Street, LLC, 58 AD3d 798 (2d Dept 2009), in which the court enforced a capital call to pay legal defense costs in a judicial dissolution proceeding, as authorized by the parties’ operating agreement and LLC Law Section 502.
- Matter of Jamaica Acquisition, Inc., 25 Misc 3d 1212(A) (Sup Ct Nassau County 2009), a dissenting shareholder appraisal case involving the valuation of former bus companies, in which the court rejected a discount for built-in capital gains.
- Watkins v. J C Land Development, Ltd., Index No. 30679-08 (Sup Ct Suffolk County June 19, 2009), in which the court applied judicial estoppel to deny shareholder standing to an ex-convict who concealed his alleged shares from probation authorities at the time of his sentencing.
- Ficus Investments, Inc. v. Private Capital Management, LLC, Index No. 600926/07 (Sup Ct NY County Feb. 23, 2009), in which the court, addressing an issue of LLC dissolution procedure, ruled that the dissolution request must be made by complaint or petition, not by "mere" motion in an existing non-dissolution action.
Wishing all my readers a happy, healthy and prosperous New Year.