2009

This week’s New York Business Divorce features an interview with Douglas Moll, Professor of Law at the University of Houston Law Center and one of the leading authorities on shareholder oppression in close corporations. Professor Moll answers questions about minority shareholder protection, LLCs, Delaware law, and also talks about his newly published treatise called The Law of Closely Held Corporations.
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Continue Reading Interview with Law Professor Douglas Moll, Leading Authority on Shareholder Oppression

When majority shareholders, for good or bad reason, terminate the minority shareholder’s employment in a closely held company that pays no dividends, is the minority shareholder’s at-will employment status a defense to an involuntary corporate dissolution proceeding? The answer arrives in this week’s New York Business Divorce courtesy of a recent decision by Justice Marily Shafer in the case of Ambar v. Devington Technologies, Ltd.
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Continue Reading Fired Minority Shareholder’s Oppression Claim Not Barred by At-Will Employment Provisions in Shareholders’ Agreement

How might involuntary corporate dissolution figure into what otherwise would be a garden variety action for goods sold and delivered? Find out in this week’s New York Business Divorce as it examines a recent decision by Justice Daniel Palmieri in The Woods Knife Corp. v. Eastman Machine Co.
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Continue Reading Dissolution Counterclaim Fails to Stall Action for Goods Sold and Delivered

The defense of “unclean hands” frequently is employed against petitions for involuntary corporate dissolution. A recent decision by Justice Stephen Bucaria, examined in this week’s New York Business Divorce, highlights the special considerations attendant to the defense in 50/50 deadlock dissolution cases, where the focus is less on fault and more on the existence of dissension.
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Continue Reading “Unclean Hands” Defense Can Backfire in Deadlock Dissolution Case

A one-of-a-kind, high-stakes dissenting shareholder appraisal proceeding is the subject of a fascinating decision by Justice Ira Warshawsky, in which he tackles disputes over trapped-in capital gains, marketability and minority discounts, widely disparate expert valuations, and entitlement to attorney’s fees and interest. Read about it in this week’s New York Business Divorce.
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Continue Reading Court Determines Fair Value in Dissenting Shareholder Case Triggered by REIT Conversion

An Illinois appellate court recently ruled in an unusual dissenting shareholder case on the valuation of shares in a single asset, real estate “C” corporation. It’s a highly interesting decision, pitting equitable considerations against valuation orthodoxy. You can either guess which prevailed, or you can read this week’s New York Business Divorce.
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Continue Reading In Unusual Case, Illinois Appellate Court Reduces Fair Value Award to Dissenting Shareholder

This week’s New York Business Divorce travels to the Green Mountains of Vermont, whence comes a carefully reasoned decision holding that the courts of that state lack subject matter jurisdiction to hear a petition for judicial dissolution of a Delaware LLC. New York courts have reached the same conclusion, but without offering much if any analysis, which makes the Vermont case all the more noteworthy.
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Continue Reading Vermont Court Declines Jurisdiction Over Dissolution of Delaware LLC

Fights over the good will value of a business are not uncommon in corporate dissolution and buyout proceedings. In this week’s New York Business Divorce, read about a recent appellate decision holding that courts lack authority to appraise good will post-dissolution in the absence of an agreement of the parties that good will is a distributable asset of the corporation.
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Continue Reading Appellate Court Upholds Denial of Good Will Appraisal in Deadlock Dissolution Case

The death in 2007 of Claudia Cohen, a well-known gossip columnist and socialite who married and divorced billionaire Ronald Perelman, led to a high-stakes litigation between her estate and her surviving brother over the valuation of the estate’s 50% share in a family partnership that directly or indirectly owned real estate interests with a market value over $20 million. A recent court decision ruled against the estate’s $11.5 million claim and, instead, enforced a $178,000 “net book value” buyout under the partnership agreement’s formula, also rejecting the estate’s argument that such a drastically below-market buyout was unconscionable. Read this week’s New York Business Divorce to get the full story.
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Continue Reading Court Rejects Unconscionability Argument in Family Partnership Valuation Case, Concludes that “Full and True Value” Equals “Net Book Value” as Defined by Agreement

Including buy-sell provisions in a shareholders’ or operating agreement is a good idea, but if the agreement fails to clearly define basic valuation parameters it may lead to the very litigation that the agreement was intended to avoid. Case in point: Justice Ira Warshawsky’s recent decision in Sassower v. 975 Stewart Avenue Associates, LLC, featured in this week’s New York Business Divorce.
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Continue Reading Case Illustrates Importance of Clear Valuation Parameters in Buy-Sell Agreement Among Owners of Closely Held Business