2009

The baseball season is upon us but there’s no joy in Mudville or, at least, at the Cooperstown All Stars Village baseball camp where the co-owners of a limited liability company are playing hardball litigation. The Third Department umpire recently called a preliminary injunction in favor of the non-controlling team after the controlling member pitched a high-and-inside capital call. Read about it in this week’s New York Business Divorce.
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Continue Reading Court Enjoins “Squeeze-Out” Capital Call by Controlling Members of LLC

A pair of recent decisions by New Jersey courts permits corporate dissolution petitions under that state’s law for foreign corporations based in New Jersey. Would such a petition succeed in New York? Discover the answer in this week’s New York Business Divorce.
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Continue Reading New Jersey Courts Apply State’s Dissolution Statute to Foreign Corporations: Can it Happen in New York?

In the last of a three-part series on disputes over stock ownership in corporate dissolution cases, this week’s New York Business Divorce examines a case decided by New York County Justice Lewis Bart Stone involving a fight between three family members, each of whom took a different position over the ownership of the company shares.
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Continue Reading Undocumented Stock Interests Invite Challenges to Standing in Corporate Dissolution Cases: Part Three

In the second of a three-part series on challenges to stock ownership in corporate dissolution cases, this week’s New York Business Divorce looks at a recent post-trial ruling by Kings County Supreme Court Justice Jack Battaglia pitting one shareholder claiming 100% ownership versus two others claiming that the three were equal one-third owners.
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Continue Reading Undocumented Stock Interests Invite Challenges to Standing in Corporate Dissolution Cases: Part Two

This week’s New York Business Divorce presents the first in a three-part series discussing one of the thorniest problems in corporate dissolution contests involving challenges to standing based on the petitioner’s lack of a stock certificate, shareholders’ agreement or other direct evidence of shareholder status. This week’s post highlights a recent decision on the subject by Suffolk County Commercial Division Justice Emily Pines.
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Continue Reading Undocumented Stock Interests Invite Challenges to Standing in Corporate Dissolution Cases: Part One

The LLC Law authorizes a court to decree dissolution of a limited liability company “on application by or for a member.” Must the application be made by way of a complaint in an action or a petition in a special proceeding? How about by way of a motion or cross motion without a pleading? Find out how New York County Commercial Division Justice Bernard J. Fried answered these questions in a recent ruling featured in this week’s New York Business Divorce.
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Continue Reading Application for Judicial Dissolution of LLC Must Be Made by Complaint or Petition, Mere Motion Will Not Suffice

Suffolk County Commercial Division Justice Elizabeth Hazlitt Emerson recently decided a fair value appraisal in a stock buyout proceeding under BCL 1118, in which she rejected the two experts’ widely divergent conclusions of value in favor of her own computation based on the income approach. Read all about it in this week’s New York Business Divorce.
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Continue Reading Court Rejects Experts’ Appraisals in Fair Value Proceeding, Relies on Own Computation Using Income Approach

In the aftermath of last year’s Court of Appeals decision in Tzolis v. Wolff, giving LLC members a common law right to bring derivative actions, the Appellate Division, First Department, recently faced the question: Does Tzolis mandate recognition of an LLC member’s common law right to compel an equitable accounting of the LLC’s business affairs? See how the court answered in this week’s New York Business Divorce.
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Continue Reading Court Adds Accounting Remedy to LLC Members’ Arsenal

It’s a familiar story line to readers of this blog: LLC minority member sues for dissolution. Majority members adopt resolution requiring all members to contribute cash to pay legal expenses in the defense of the litigation. Plaintiff cries foul. See how it played out in a recent decision by the Appellate Division, Second Department, in this week’s New York Business Divorce.
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Continue Reading LLC Dissolution Case Illustrates Peril to Minority Member of Compulsory Capital Contribution Provision in Operating Agreement