Buy-sell agreements are commonly used to break fundamental deadlock in companies owned by 50/50 shareholders. This week’s New York Business Divorce examines a recent decision by Justice David Schmidt in Mintz v. Pazer in which he enforced an unusual buy-sell agreement that prompted a lawsuit over which side had the right to buy out the other.
Continue Reading Court Enforces “Quick Draw” Buy-Sell Agreement in Suit Between 50/50 Shareholders
March 2014
Is Denial of Shareholder Status Shareholder Oppression?
By Peter A. Mahler on
Posted in Grounds for Dissolution, Standing
A recent decision by Justice Marcy Friedman draws attention to a somewhat rare breed of minority shareholder oppression involving the controlling shareholder’s repudiation of the petitioner’s stock ownership. It’s a case you won’t want to miss, in this week’s New York Business Divorce.
Continue Reading Is Denial of Shareholder Status Shareholder Oppression?
Stock Redemption Agreement Forecloses Seller’s Suit for Tax Liability on Phantom Income
By Peter A. Mahler on
Posted in Buyout, Phantom Income
Pass-through tax entities including S corporations and LLCs can create personal tax liability on so-called phantom income, that is, undistributed net income allocated on Form K-1. A case recently decided by a Manhattan appeals court tells the tale of a selling shareholder’s costly failure to deal with the issue of phantom income in a stock buy-out agreement. This week’s New York Business Divorce has the story.
Continue Reading Stock Redemption Agreement Forecloses Seller’s Suit for Tax Liability on Phantom Income
Appellate Court Rejects LLC Manager’s Safe-Harbor Defense, Finds Breach of Fiduciary Duty
By Peter A. Mahler on
Last week’s decision by the Appellate Division, First Department, in Pokoik v. Pokoik appears to be the first appellate ruling applying the safe-harbor provision in Section 409 of New York’s LLC Law governing duties of managers. Learn more about this important development in this week’s New York Business Divorce. …
Continue Reading Appellate Court Rejects LLC Manager’s Safe-Harbor Defense, Finds Breach of Fiduciary Duty
Court Limits Scope of Release, Denies Advancement of Defense Costs in Sibling “Food Fight”
A noteworthy decision last week by Justice Carolyn Demarest is featured in this week’s New York Business Divorce. The case, involving a fight between sibling co-owners of a food distributor and a separate realty company, addresses important issues concerning the scope of a general release and LLC members’ right to advancement of legal defense costs. …
Continue Reading Court Limits Scope of Release, Denies Advancement of Defense Costs in Sibling “Food Fight”