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In this week’s New York Business Divorce, we discuss a recent decision serving as a reminder to corporate shareholders planning to bequeath their shares of stock to ensure no contracts prohibit them from doing so, lest they leave behind a very disappointed beneficiary.
Continue Reading When Estate Plans and Stock Transfer Restrictions Collide

Partners of New York limited partnerships should sit up and take notice of a new, first-impression decision holding that the commencement of a dissolution proceeding against, or the appointment of a receiver for, the limited partnership can, in and of itself, result in withdrawal of the general partner and dissolution of the entity, even if the limited partnership agreement does not say so. Read about this important decision with profound implications for New York limited partnerships and their owners in this week’s New York Business Divorce.
Continue Reading Limited Partnerships and the Self-Fulfilling Dissolution Petition

This week’s New York Business Divorce compares two cases of closely-held business owner withdrawal, one involving an LLC, the other a general partnership, one resulting in a right to an accounting, the other not. Why the difference? Read on to find out.
Continue Reading Two Entities, Two Outcomes: Withdrawal and the Right to an Accounting

In this week’s New York Business Divorce, we tackle the rules governing enforceability of oral partnership, shareholder, and operating agreements, including a first-impression appeals court decision addressing the validity of an alleged oral modification of written limited partnership agreement under New York’s Revised Limited Partnership Act.
Continue Reading Enforceability of Oral Operating, Shareholder, and Partnership Agreements

In this week’s New York Business Divorce, read about the exceedingly versatile cause of action of breach of fiduciary duty and the many remedies courts may award upon a finding of breach. This week’s post focuses on two remedies in particular: disgorgement of profits obtained through self-dealing, and recovery of attorneys’ fees when pled derivatively.
Continue Reading The Common-Law Tort of Breach of Fiduciary Duty: The Total Package

Man marries and has a daughter. He executes an operating agreement providing for his wife and daughter to take his LLC interest upon death. But the man has an alleged mistress, who allegedly begets a daughter out of wedlock. The man then executes a will providing for his alleged mistress and out-of-wedlock daughter to take his LLC interest upon death, contrary to the operating agreement. What could go wrong? You can read about this steamy litigation in this week’s New York Business Divorce.
Continue Reading How to Resolve Competing Estate Plans of an LLC Owner with a Double Life

In this week’s New York Business Divorce, we consider a remarkably thoughtful opinion by Commercial Division Justice Jennifer G. Schecter containing some noteworthy hints about the future of LLC dissolution claims in light of the coronavirus pandemic and its catastrophic economic impact on New York closely-held businesses.
Continue Reading Will the Pandemic Be a Boon for Future LLC Dissolution Claimants?

In this week’s New York Business Divorce, we consider a thoughtful decision from Manhattan Commercial Division Justice Andrea J. Masley about the rules for pleading pre-suit demand or demand futility upon a “liquidator” appointed to wind up the affairs of the corporation, including the rarely-litigated concept that allegations of pre-suit demand or demand futility can potentially “relate back” to a prior pleading that is “validly in litigation.”
Continue Reading The Pre-Suit Demand Requirement for a Corporation in Liquidation or Receivership