A decision last month by Justice Carolyn Demarest, in Novikov v. Oceana Holdings Corp., granted a minority shareholder’s books-and-records petition predicated on the need to investigate possible management misconduct. On the heels of a recent First Department case to similar effect, might this be the start of a trend? Find out more in this week’s New York Business Divorce.
Continue Reading Minority Shareholder’s Investigation of Management Misconduct is Proper Purpose for Books & Records Demand
No Meeting, No Vote Required for LLC’s Freeze-Out Merger Approved by Majority’s Written Consents
The statute governing LLC mergers requires a member vote at a meeting to be held on at least 20 days notice. In Slayton v. Highline Stages, LLC, the majority members used written consents in lieu of a meeting to approve a freeze-out merger, which the frozen-out minority member challenged. Did she succeed? Find out in this week’s New York Business Divorce.
Continue Reading No Meeting, No Vote Required for LLC’s Freeze-Out Merger Approved by Majority’s Written Consents
Squabbling Partners with Piecemeal Adjudications Need Not Apply
Over the last year or so Nassau County Commercial Division Justice Stephen Bucaria has issued a series of decisions in disputes among co-owners of close corporations and LLCs applying the ancient rule of partnership law prohibiting courts from adjudicating such disputes except when dissolution or a final accounting is sought. Learn more about this intriguing development in this week’s New York Business Divorce.
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Court Construes Member Expulsion Provision in LLC Agreement
There’s sure to be fireworks — or at least litigation — when one of two 50% members of an LLC attempts to terminate the other for wrongful conduct as vaguely defined in the LLC agreement, as illustrated in an appellate ruling last month in Harker v. Guyther, featured in this week’s New York Business Divorce.
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Restaurant’s Cash-Skimming Majority Owners Forced to Buy Out Minority Shareholder or Face Dissolution
On the heels of the Zelouf and AriZona Iced Tea cases, this week’s New York Business Divorce highlights yet another interesting fair value contest, decided by Justice Carolyn Demarest, involving a battle of forensic accounting and valuation experts over the alleged skimming of millions in cash receipts at a restaurant.
Continue Reading Restaurant’s Cash-Skimming Majority Owners Forced to Buy Out Minority Shareholder or Face Dissolution
Court Rejects Potential Acquirers’ Expressions of Interest, Relies Solely on DCF Method to Determine Fair Value of 50% Interest in AriZona Iced Tea
After years of litigation and a lengthy trial, earlier this month Justice Timothy Driscoll released his decision fixing the fair value of the petitioning 50% shareholder’s interest in the AriZona Iced Tea companies. You won’t want to miss it in this week’s New York Business Divorce.
Continue Reading Court Rejects Potential Acquirers’ Expressions of Interest, Relies Solely on DCF Method to Determine Fair Value of 50% Interest in AriZona Iced Tea
Zelouf (Part Two): Fair Value Ruling Addresses Range of Issues
Last week’s post highlighted Justice Kornreich’s rejection of a marketability discount in the Zelouf case, a dissenting shareholder appraisal proceeding. In this week’s Part Two, New York Business Divorce examines a number of additional issues of interest in the Zelouf decision, including tax-affecting, control premium, and damages for quasi-derivative claims.
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Zelouf (Part One): Marketability Discount Rejected in Fair Value Proceeding
This week’s New York Business Divorce presents the first of a two-part examination of Justice Shirley Kornreich’s must-read decision in Zelouf International v. Zelouf, a dissenting shareholder appraisal proceeding in which the court rejected application of a marketability discount.
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Understanding Standing in Corporate Dissolution Cases
This week’s New York Business Divorce offers a primer on the fundamental issue of standing to seek judicial dissolution of a closely held business corporation, featuring a review of the statutory criteria and related case law.
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You’re Fired! No, I’m Oppressed!
Tom Rutledge, one of the country’s leading lawyers and commentators on business organizations, recently published a fascinating article on minority shareholder oppression in which he challenges whether courts ought to provide remedies for terminated at-will employees who also happen to be minority shareholders. Read about it in this week’s New York Business Divorce.
Continue Reading You’re Fired! No, I’m Oppressed!