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This week’s New York Business Divorce takes a look at the common-law history leading to the enactment of BCL 713 regulating self-interested transactions by corporate directors, along with illustrative synopses of cases applying the statute.
Continue Reading Enforcing the Guardrails on Transactions Involving Interested Directors of Close Corporations

Welcome to this year’s Winter Case Notes where, amidst the arctic blast currently sweeping most of the nation, I offer shortish takes on several court decisions in recent business divorce cases.

This year’s edition features notable decisions by New York courts stemming from cases with, shall we say, not your typical fact patterns:

  • Affirming the lower court’s post-trial verdict rejecting a shareholder’s claim to enforce an alleged agreement requiring the defendant shareholder, following the plaintiff’s acquittal on murder charges, to transfer back to the plaintiff shares he sold to the plaintiff in the course of the plaintiff’s lengthy criminal proceedings;
  • Without deciding whether the death — accidental in this case — of an LLC member qualifies as a withdrawal for purposes of LLC Law § 509’s buyout provision, ordering the surviving member to turn over books and records to the estate representative but only through the date of death; and
  • Denying interim injunctive relief restoring a minority shareholder to his former management position in a group of auto dealerships upon the court’s finding that the plaintiff failed to establish a likelihood of success on his claims of minority shareholder oppression and that the governing agreements were never effective.

Continue Reading Winter Case Notes: Murder, Forgery, Accidental Death, Oppression, Oh My!

This week’s New York Business Divorce presents a retrospective assessment of the state of New York law concerning LLC business divorce, including summaries of the most significant court decisions, adapted from a recent presentation at the Eileen Bransten Institute on Complex Commercial Litigation.
Continue Reading New York LLC Caselaw’s Greatest Hits

This week’s New York Business Divorce looks at the courts’ powers to order equitable remedies short of dissolution in judicial dissolution cases involving LLCs, featuring a highly unusual case from Mississippi.
Continue Reading The Magnolia State Wins the Prize for Novel Alternative Remedies in LLC Dissolution Cases

This week’s New York Business Divorce revisits the Eastland Food v Mekhaya case, focusing on last month’s Maryland Supreme Court’s split decision on whether the minority shareholder has a direct claim for breach of fiduciary duty based on alleged disguised distributions taken by the controlling shareholders.
Continue Reading Eastland Redux: Do Close Corporation Shareholders Have a Direct Claim Against Directors For Taking Disguised Distributions?

If an oppressed, frozen-out minority shareholder is going to sue for judicial dissolution, chances are they’re going to do it within the applicable six-year statute of limitations. This week’s New York Business Divorce examines a recent decision where the shareholder claiming oppression waited at least 10 years to sue.
Continue Reading When Is It Too Late to Sue for Shareholder Oppression?