2009

A decision last week by the Second Department highlights a split of authority among New York’s intermediate appellate courts whether New York courts have subject matter jurisdiction over petitions to dissolve foreign business entities. Learn more in this week’s New York Business Divorce.
…
Continue Reading Appellate Rulings Clash Over Subject Matter Jurisdiction to Dissolve Foreign Business Entities

This week’s New York Business Divorce features a recent decision by Justice Bernard Fried granting dissolution of an LLC owned 50-50 by two members locked in several highly contentious lawsuits. The decision addresses standing of a membership interest assignee to seek dissolution, and whether deadlock can establish ground for dissolution of a passive investment holding company.
…
Continue Reading Court Grants 50% LLC Member’s Petition for Judicial Dissolution of Passive Holding Company

A majority shareholder’s breach of fiduciary duty owed a minority shareholder may constitute oppressive action within the meaning of the judicial dissolution statute. But does oppressive conduct constitute breach of fiduciary duty? A recent federal court decision suggests so, but is it right? Read this week’s New York Business Divorce and see for yourself.
…
Continue Reading Fiduciary Breach Can Result in Shareholder Oppression, But Is Shareholder Oppression a Breach of Fiduciary Duty?

Common law dissolution is something of a remedy of last resort for the oppressed minority shareholder who does not hold the requisite 20% of the corporation’s voting shares to bring a dissolution proceeding under BCL Section 1104-a. This week’s New York Business Divorce highlights a recent decision by Queens County Commercial Division Justice Orin Kitzes ordering a hearing to determine a common law dissolution petition brought by 15% shareholders of a restaurant business.
…
Continue Reading Court Orders Hearing On Minority Shareholder’s Petition for Common Law Dissolution

Mediation has become an important and increasingly popular alternative path to dispute resolution. This week’s New York Business Divorce features an interview with former law professor turned mediator Leona Beane on the subject of the mediation of business divorce cases.
…
Continue Reading Mediation and Business Divorce: Interview with Mediator Leona Beane

When a claim for judicial dissolution is denied or otherwise drops out of the case, that doesn’t necessarily mean the case is over. This week’s New York Business Divorce discusses two recent decisions by Justices Patricia Satterfield and Shirley Werner Kornreich in which the side opposing dissolution prevailed but left unresolved other claims addressing the parties’ underlying differences.
…
Continue Reading Winning the Dissolution Battle, Losing the War

Corporate bylaw provisions governing the number of directors and procedures for their appointment can sometimes play a critical role in the outcome of disputes among shareholders of closely held corporations, as illustrated in a recent case highlighted in this week’s New York Business Divorce involving a small residential co-op.
…
Continue Reading Pay Attention to the Latent Power of Corporate Bylaws

Valuation discounts are among the most hotly contested issues in minority shareholder buy-out proceedings triggered by dissolution petitions. As between the discount for lack of marketability and the minority discount (a/k/a discount for lack of control), New York case law allows one of them and prohibits the other. Do you know which is which? Find out in this week’s New York Business Divorce.
…
Continue Reading What’s the Difference Between Marketability and Minority Discounts?

This week’s New York Business Divorce features a recent decision by the Appellate Division, Second Department, reversing the denial of a preliminary injunction centering on the enforceability of a written Nominee Agreement which acknowledged Party A as the “true owner” of a 50% stock interest in the corporation and appointed as his nominee Party B who otherwise was reflected as 100% owner in all of the corporation’s records and tax filings.
…
Continue Reading Nominee Agreement Trumps Corporation Records in Fight Over Stock Ownership