Under traditional principles of business valuation, courts are generally expected to eschew metrics post-dating the valuation date. But often, litigants hoping to either increase or decrease an entity’s valuation ask courts to consider post-valuation date events or financial performance as affirmatory or disaffirmatory of financial projections or assumptions made before or as of the valuation date. Sometimes, litigants succeed in that endeavor. Read about a recent example in this week’s New York Business Divorce.
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Foreign Affairs of the Books and Records Kind
New York case law concerning shareholder rights to inspect books and records of foreign business entities is far from settled. This week’s New York Business Divorce features two recent decisions in books and records cases involving a Delaware corporation and a Nevada LLC, with mixed results.
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Corporate Dissolution Petition Hits Back Burner in Favor of Earlier Filed Claims for Money Damages
The shareholder oppression claim under BCL 1104-a has a unique relationship with claims for money damages.
A minority shareholder petitioning for dissolution under BCL 1104-a must establish that the majority shareholders have engaged in “illegal, fraudulent or oppressive actions,” or that the “property or assets of the corporation are being looted, wasted, or diverted for non-corporate purposes by its directors, officers or those in control of the corporation.”
Based on that standard, it’s easy to imagine conduct by the majority that both meets the criteria for dissolution and constitutes a separate tort compensable with money damages (for instance, a claim for the majority’s breach of fiduciary duty). For that reason, it’s very common to see a dissolution petition coupled with money damages claims, all arising out of the same conduct.
But where the money damages claims are filed before the dissolution petition, a plaintiff might be forced to litigate those to completion prior to pursuing their dissolution petition. That’s the tough lesson learned by the petitioner of a dissolution proceeding brought under BCL 1104-a, in Ramirez v Issa, 2024 N.Y. Slip Op. 33488[U] [NY County 2024], the subject of this week’s post.Continue Reading Corporate Dissolution Petition Hits Back Burner in Favor of Earlier Filed Claims for Money Damages
Bookkeeper Liability? It’s a Real Thing
For burned business owners, the list of potential litigation targets just got a little bigger. Bookkeepers are now in the crosshairs. Read about it in this week’s New York Business Divorce.
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