Cross-border business divorce disputes continue to bedevil New York’s commercial courts, forcing them to grapple with difficult conflicts-of-laws questions. We feature the latest instance on this week’s New York Business Divorce.
Indecision Has a Price: Withdraw Lawsuit, Pay Hefty Fee Award
After three years of litigation, can a petitioner abruptly withdraw a business dissolution proceeding without consequences? A recent decision from Justice Reed in the New York County Commercial Division answers that question with a decisive “No.”
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How Easily Can an Operating Agreement Supplant the Default Rule for LLC Manager Removal? Pretty Easily.
This week on New York Business Divorce, read about the interplay between statutory and contract rules for LLC manager removal or expulsion, set within an appeal from a trio of decisions we wrote about what feels like a lifetime ago.
Roller Coaster Ride: Interlocutory Appeals in Business Divorce Cases
In New York civil practice, appeals from non-final orders, called interlocutory appeals, have the awesome power to transform a case before its conclusion, snatching defeat from the jaws of victory, and vice versa. Read about one such instance in this week’s New York Business Divorce.
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Seller Beware: The “Exclusive” Fair Value Appraisal Remedy Really is Exclusive
How exclusive is the “exclusive” fair value appraisal remedy of Business Corporation Law § 623? So exclusive, according to the Second Department, that the statute bars a shareholder who consented to an asset sale from suing the other shareholder for making off with the sale proceeds after the closing. Let’s unpack this harsh result in this week’s New York Business Divorce.
Continue Reading Seller Beware: The “Exclusive” Fair Value Appraisal Remedy Really is Exclusive
Hoping to Take Assignment of an LP or LLC Interest? Best Read the Contract
A recent decision from one of our favorites, Albany County Commercial Division Justice Richard M. Platkin, is a reminder to would-be assignees of limited partnership interests that without total compliance with the terms and conditions of the partnership agreement, an attempted assignment conveys only economic rights (i.e., the right to distributions, profits, and losses), but not voting or management rights, even if both sides to the assignment genuinely intended transfer of all ownership rights.
Although not an LLC case, the concept of Marini v Marini Realty LP (2025 NY Slip Op 51138[U] [Sup Ct, Albany County July 2, 2025]), applies equally to LLC members: to become a full-blown equity holder with all attendant rights and privileges, compliance with the governing contract (or if none, the default rules under the Partnership Law and Limited Liability Company Law) is essential. Standard language in such contracts requires unanimity for admission of new equity owners. After all, who wants to take on a new partner without one’s consent? Less than total compliance conveys only economic benefits, not voting or management rights.Continue Reading Hoping to Take Assignment of an LP or LLC Interest? Best Read the Contract
A Tardy Plaintiff’s Best Friend: The Open Repudiation Doctrine
Pre-answer motions to dismiss for untimeliness are exceptionally common in business divorce litigation. Statute of limitations analysis can be deceptively simple in theory, but elusively difficult in practice, even for veteran judges. Identifying the applicable statute of limitations is just one of three steps a court must perform as part of its decision making process:
- What’s the applicable statute of limitations?
- What’s the accrual date of the claim?
- Are there any applicable tolls or equitable exceptions?
A recent decision from the Albany-based Appellate Division – Third Department, Lambos v Karabinis (___ AD3d ___, 2025 NY Slip Op 03367 [3d Dept June 5, 2025]), is a reminder to business divorce litigants – on either side of the v. – not to overlook that crucial third step in the statute of limitations analysis, which can rescue complaints from pre-answer dismissal even if they allege misconduct from decades earlier.Continue Reading A Tardy Plaintiff’s Best Friend: The Open Repudiation Doctrine
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
Business Appraiser Liability? That’s a New One.
Business appraiser liability? A minority owner of an LLC recently took a run at it, alleging that a valuation firm conspired with the majority owners to undervalue his interest for a compelled buyout under the operating agreement. Learn how the court handled this novel issue in this week’s New York Business Divorce.
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Premature or Untimely? Both at the Same Time? When to Sue as a General Partner
Can a partnership dispute be premature and untimely simultaneously? That was the unfortunate outcome for a hapless general partner in this week’s New York Business Divorce.
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