In this week’s New York Business Divorce, read about the potent convergence in a recent decision of two common-law fiduciary duty principles: the corporate opportunity and faithless servant doctrines.
Continue Reading A Potent Combo: Misappropriation of Corporate Opportunity Meets Faithless Servant
A Recurring Business Divorce Feature: Usurpation of Corporate Opportunity
A claim for “usurpation of corporate opportunity” is simple to allege, but difficult to prove. Two recent cases out of the Manhattan Commercial Division and the U.S. District Court for the Southern District of New York explore the bounds of the corporate opportunity doctrine under New York and Delaware law.
Continue Reading A Recurring Business Divorce Feature: Usurpation of Corporate Opportunity
How Not to Start a Corporate Dissolution Proceeding
In this week’s New York Business Divorce, a would-be dissolution petitioner just could not catch a break in a series of procedural losses emanating out of Bronx County Supreme Court.
Continue Reading How Not to Start a Corporate Dissolution Proceeding
Dissecting the Order to Show Cause in Corporate Dissolution Proceedings
The order to show cause is a critical document drafted by the petitioner’s counsel for signature by the judge when initiating a corporate dissolution proceeding. This week’s New York Business Divorce offers a drafting primer using some illustrative forms.
Continue Reading Dissecting the Order to Show Cause in Corporate Dissolution Proceedings
Do Not Take Pre-Trial Discovery for Granted in Corporate Dissolution Proceedings
This week’s New York Business Divorce features a nuts-and-bolts issue concerning the limited availability of depositions and other discovery in corporate dissolution cases, prompted by a recent ruling on the subject by Nassau County Commercial Division Justice Timothy S. Driscoll in Matter of Kaufman (L.I. Yellow Cab Corp.).
Continue Reading Do Not Take Pre-Trial Discovery for Granted in Corporate Dissolution Proceedings
Court Rejects Bid by Corporate Dissolution Petitioner to Voluntarily Withdraw Case Without Prejudice
If you’re going to accuse your business partner of bad acts and ask for judicial dissolution of the business, be prepared to settle or take the case all the way to trial. That seems to be the message given to the petitioner in a recent case highlighted in this week’s New York Business Divorce, when the court turned down her request to withdraw the case “without prejudice.”
Continue Reading Court Rejects Bid by Corporate Dissolution Petitioner to Voluntarily Withdraw Case Without Prejudice
Misappropriated Watering Hole Becomes Money Judgment Sinkhole
In this week’s New York Business Divorce, read about an unusually brazen case of misappropriation of corporate opportunity culminating in a hefty judgment against the perpetrators, including punitive damages and an accounting surcharge.
Continue Reading Misappropriated Watering Hole Becomes Money Judgment Sinkhole
A Litigation Odyssey
In this week’s New York Business Divorce, read about a multi-year litigation odyssey culminating in the statute-of-limitations dismissal of a claim for misappropriation of an alleged corporate opportunity to own land based upon the date of execution of the contract of sale rather than the closing of the real estate purchase.
Continue Reading A Litigation Odyssey
A Message of Acceptance from the Garden State
This week’s New York Business Divorce takes us to the Garden State for a delightfully-written, post-trial decision by retired, recalled Appellate Division Judge Clarkson S. Fisher, Jr.
Cheshun v Sikand, Opinion [NJ Super Ct, Monmouth County May 7, 2025]), was a dissolution proceeding under New Jersey’s version of the Revised Uniform Limited Liability Company Law (“RULLCA”) between two 50/50 LLC member-managers who founded and operated an entity they hoped would perform clinical drug trials, but which never really got off the ground.
A couple of lessons emerge from Cheshun.
First, it seems obligatory for close entity owners and their litigation counsel to throw stones, cast aspersions, and lay blame for the business’s demise. But like marriages, sometimes business relationships fail because of good faith disagreements and reasonable, dashed expectations. Sometimes nobody is to blame. And that is ok.
Second, business owners may agree to part ways, but the decision to do so does not sever the existence of one’s ongoing fiduciary duties. Fiduciary duties continue through the conclusion of the wind up process. In the words of Judge Fisher, where a business entity is in a “state of un-woundedness,” failure to heed one’s fiduciary duties – even after an agreement to separate – can prove costly.Continue Reading A Message of Acceptance from the Garden State
Two Cases. Two Mammoth Fee Awards. Coup de Grâce or Pyrrhic Victory?
In this week’s New York Business Divorce, read about the grand finale conclusion of two important cases previously featured on this blog, with massive affirmed attorneys’ fee awards in both, one by statute, one by contract.
Continue Reading Two Cases. Two Mammoth Fee Awards. Coup de Grâce or Pyrrhic Victory?