Pizza’s on the menu in this week’s New York Business Divorce, or at least a dispute between co-members of an LLC that owns a popular Manhattan pizzeria. Just don’t look for any extra cheese on Justice Sherwood’s recent decision in Manzella v. Caporuscio, authorizing the majority member to terminate the minority member’s employment.
Continue Reading Pizza Chef with Bigger Piece of LLC Pie Allowed to Terminate Minority Member’s Employment
Court Enforces Waiver of Limited Partner’s Right to Seek Judicial Dissolution — Or Did It?
A very interesting decision earlier this month by Justice Eileen Bransten in Doppelt v. Smith addressed whether a minority limited partner’s right to seek judicial dissolution was preempted by the partnership agreement’s provision authorizing dissolution upon the consent of a majority of the limited partnership interests. Read more in this week’s New York Business Divorce.
Continue Reading Court Enforces Waiver of Limited Partner’s Right to Seek Judicial Dissolution — Or Did It?
Don’t Miss These Upcoming Programs on LLCs and Business Valuation
The LLC Institute, the New York Law Journal, and the American Institute of CPAs are all sponsoring upcoming continuing education programs of great interest to business divorce professionals, at two of which I’ll be a panel member. Get the details in this week’s New York Business Divorce.
Continue Reading Don’t Miss These Upcoming Programs on LLCs and Business Valuation
Involuntary Member Dissociation Under RULLCA
In states that have enacted the Revised Uniform LLC Act, courts can expel or “dissociate” a member on specified grounds including the member’s conduct that makes it no longer reasonably practicable to carry on the LLC’s activities with that person as a member. In this week’s New York Business Divorce, read about a recent New Jersey appellate decision applying that state’s version of the dissociation statute.
Continue Reading Involuntary Member Dissociation Under RULLCA
Business Divorce Case Reaches End of Long and Winding Road
A shareholder dispute spanning seven years of litigation in New York and Delaware came to an end last week with the latter state’s highest court’s refusal to rehear the case. This week’s New York Business Divorce highlights two of the many issues raised along the way: whether Delaware law recognizes a common-law claim for minority shareholder oppression, and the validity of a reverse stock split and cash-out of the minority shareholder that deprived her of standing to pursue derivative claims.
Continue Reading Business Divorce Case Reaches End of Long and Winding Road
First a Judicial Nudge, Then a Push to the Buy-Out in Shareholder Dispute
A noteworthy decision by Justice Stephen A. Bucaria in Carrillos v Gomez, in which he ordered a shareholder buy-out at fair value in the absence of a dissolution petition, is featured in this week’s New York Business Divorce.
Continue Reading First a Judicial Nudge, Then a Push to the Buy-Out in Shareholder Dispute
Can LLC Agreement Be Enforced Against Member Who Doesn’t Sign It?
You may be surprised to learn that, according to a ruling last month in Shapiro v Ettenson, a minority member of a New York LLC that initially had no written operating agreement is bound by a written operating agreement subsequently adopted by the majority members, notwithstanding the minority member’s refusal to sign the agreement. Get the detailed story in this week’s New York Business Divorce.
Continue Reading Can LLC Agreement Be Enforced Against Member Who Doesn’t Sign It?
Summer Shorts: Member Expulsion and Other Recent Decisions of Interest
Traditions are good. This blog has two annual traditions. First, at the end of each year I write a post listing the year’s top ten business divorce decisions. Second, each August I offer readers who are (or ought to be) on summer vacation some light reading in the form of three, relatively short case summaries.
So here we are in what’s been a particularly felicitous August weather-wise (at least here in the Northeast U.S.), with another edition of Summer Shorts. This edition’s summaries feature two out-of-state cases — one from Florida involving expulsion of an LLC member and one from Delaware involving the valuation upon redemption of an LLC member’s interest — and a New York appellate court decision involving the removal of a limited partnership’s general partner.
The Anti-Chiu: Florida Court Upholds LLC Member’s Expulsion
Froonjian v Ultimate Combatant, LLC, No. 4D14-662 [Fla. Dist. Ct. App. May 27, 2015]. The Florida intermediate appellate court’s ruling in Froonjian makes for a fascinating contrast with New York case law represented most prominently by the Second Department’s 2010 decision in Chiu v Chiu holding that, absent express authorization in the LLC’s operating agreement, a member’s involuntary expulsion is not permitted. Going 180° in the other direction, the Froonjian court upheld the majority members’ expulsion of a minority member from a Florida LLC that had no operating agreement, reasoning that the Florida default statute vesting all decision-making authority in the members acting by majority vote encompasses the authority to expel a member.
Continue Reading Summer Shorts: Member Expulsion and Other Recent Decisions of Interest
Delaware LLC Agreement Says Members Waive Right to Sue Outside New York, But New York Judge Says Otherwise in Dissolution Case
A recent decision by Manhattan Commercial Division Justice Jeffrey Oing dismissed for lack of subject matter jurisdiction a petition to dissolve a Delaware LLC whose operating agreement included a venue provision waiving the members’ right to sue anywhere but New York. Get the full story in this week’s New York Business Divorce.
Continue Reading Delaware LLC Agreement Says Members Waive Right to Sue Outside New York, But New York Judge Says Otherwise in Dissolution Case
“Locked in Corporate Hell”: Bitter Feud Between Deadlocked 50/50 Owners Leads Court to Order Sale of Lucrative Company
Hard to believe the two, 50/50 owners of a company with half a billion annual sales and $80 million profit can’t overcome their mutual antipathy, but that’s exactly what happened in Shawe v. Elting, a decision last week by the Delaware Chancery Court ordering the appointment of a custodian to sell the company. It’s in this week’s New York Business Divorce.
Continue Reading “Locked in Corporate Hell”: Bitter Feud Between Deadlocked 50/50 Owners Leads Court to Order Sale of Lucrative Company