2020

George Costanza would be unhappy to hear about an Appellate Division decision last week affirming a trial court ruling, among others of interest in an LLC appraisal proceeding, in which it rejected as “double dipping” a request for post-valuation date income distributions on top of the fair value award. Learn more in this week’s New York Business Divorce.
Continue Reading No Double Dipping! Court Denies Post-Valuation Date Distributions in Equitable Buyout of LLC Member

Can a shareholder petitioning for dissolution under Section 1104-a of the Business Corporation Law rely upon the “surcharge” provision of the statute to sue a non-shareholder, director, or officer for corporate misappropriation as an end-run around legal obstacles to an otherwise viable substative cause of action? We tackle that issue in this week’s New York Business Divorce.
Continue Reading Who Is a “Control” Person for Purposes of the Dissolution Statute’s Surcharge Provision?

This week’s New York Business Divorce examines a noteworthy decision by Justice Richard Platkin involving the break-up of a law firm organized as a professional services limited liability company, in which the court addressed the potential liability of two members to buy out a third member’s interest after they withdrew from the firm. …
Continue Reading Forced to Buy Out Law Partner’s Interest In Defunct Firm, Years After Withdrawing? It Can Happen

The Appellate Division, Second Department’s ruling last month in Berhend v. New Windsor Group, LLC illustrates the disastrous results when care is not taken by the assignee of an LLC interest to determine the validity of the assignor’s interest and the existence of transfer restrictions in the LLC’s operating agreement. Get the full story in this week’s New York Business Divorce.
Continue Reading Always Check Provenance Before Taking an Assignment of LLC Interest

Typically used to seek a money judgment against a successor entity, in this week’s New York Business Divorce, read about a novel appellate decision relying upon the “de facto merger” doctrine to authorize a post-judgment equitable accounting against a successor entity in which the plaintiff admittedly lacked an ownership interest or fiduciary relationship.
Continue Reading Bending the Rules of Standing: The De Facto Merger Doctrine

Shapiro v Ettenson, known as the case that made it extra dangerous for minority members of New York LLCs without written operating agreements, reappears in this week’s New York Business Divorce on the occasion of a recent decision concerning member expulsion. …
Continue Reading The Curious Case of the Expelled LLC Member Bound by Operating Agreement He Never Signed

Under what circumstances, if at all, does resignation of one member of a two-member board of directors eliminate “deadlock” and “internal dissention” as an available grounds for corporate judicial dissolution? In this week’s New York Business Divorce, we consider a recent ruling by Justice Andrea Masley on that important question.
Continue Reading Resignation: Antidote for Internal Dissention and Deadlock?