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In this week’s New York Business Divorce, read about the plight of a Brooklyn beer brewing company founder whose co-members allegedly attempted to “freeze out” his interest by way of a forced dilution and ouster from management, and his efforts to fight back with a start-of-the-case preliminary injunction motion.
Continue Reading Court Enjoins Dilution of Brewing Company LLC Membership Interest

In this week’s New York Business Divorce, a would-be LLC dissolution plaintiff goes down swinging on an unanswered complaint within an unopposed motion for a default judgment, just the latest example of New York courts closely scrutinizing the merits of LLC dissolution claims at the pleadings stage.
Continue Reading Swing and a Miss: Unopposed LLC Dissolution Claim Denied

A hot topic of late, the viability in New York of common-law dissolution of limited liability companies is cast into doubt by a new decision, the third in a series from Brooklyn Commercial Division Justice Leon Ruchelsman. Read about it, and where the case law may go from here, in this week’s New York Business Divorce.
Continue Reading Common-Law and Equitable LLC Dissolution: Going, Going, . . .

In this week’s New York Business Divorce, companion appellate decisions issued last week in the long running Kassab v Kasab litigation emphasize the fundamental legal differences between corporate and LLC dissolution, with allegations of majority “oppression” sufficient to grant dissolution in one case, but so insufficient as to require pre-answer dismissal in the other.
Continue Reading To Dissolve or Not to Dissolve, that is the Question. The Answer is Both.

In this week’s New York Business Divorce, we consider a recent appellate decision addressing the effectiveness of LLC operating agreement “exculpatory” clauses to shield the company’s managers or members from personal liability for misconduct. With the latest decision, the roster of New York appeals court cases to consider this important legal issue grows from a trio to a quartet.
Continue Reading “Intentional” Breach of Fiduciary Duty Defeats Operating Agreement’s Exculpatory Clause

In this week’s New York Business Divorce, we tackle two important legal issues for LLC owners. First, the circumstances in which an upon-death membership interest transfer provision in an unsigned, non-final operating agreement may be enforced. Second, whether a membership interest transfer provision in an operating agreement trumps a conflicting bequest in a last will and testament.
Continue Reading Unsigned, Non-Final Operating Agreement Trumps Conflicting Testamentary Bequest of LLC Interest

In this week’s New York Business Divorce, learn if it’s possible to plead the existence of a viable oral partnership whose business operated in the form of a corporation or limited liability company. The short answer: yes it can be done, but it’s not easy to do.
Continue Reading The Oral Partnership Operating as a Corporation: Is it a Partnership? A Corporation? Can it be Both?

In this week’s New York Business Divorce, read about the unhappy consequences under the “informal dissolution” doctrine to befall a corporate director who effectuated the liquidation of a defunct corporation’s assets without providing statutory notice of dissolution to the entity’s creditors.
Continue Reading “Informal Dissolution” and Individual Liability