This week’s New York Business Divorce features Part One of a two-part online interview of Claudia Landeo, Associate Professor of Economics at the University of Alberta, and Kathryn Spier, Professor of Law at the Harvard Law School, on their collaborative article forthcoming in the Yale Journal on Regulation entitled “Shotguns and Deadlocks.” The interview explores the article’s thesis, supported by economic theory and data from laboratory experiments, that courts should make greater use of the shotgun buy-out mechanism to resolve deadlock dissolution cases, and should assign the role of offeror to the better-informed owner.
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Novel Ruling in Lawsuit Over Capital Call Prods Parties to Equitable Buy-Out
In Digirolomo v. Sugar LI, LLC, decided last month by Justice Stephen Bucaria, the court devised a novel solution in a lawsuit between LLC members, designed to bring about an equitable buy-out, by conditioning injunctive relief on the plaintiffs filing an amended complaint seeking dissolution. Don’t miss it in this week’s New York Business Divorce.
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Arms-Length Sale of Corporation’s Assets Establishes Value in Stock Appraisal Proceeding
In Matter of Banani, decided last month by Justice Stephen Bucaria, the petitioner in a dissenting shareholder appraisal proceeding asked the court to accept as conclusive evidence of the company’s value the price received in a sale of substantially all the company’s assets. Find out if the court granted the request in this week’s New York Business Divorce.
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Equitable Dissolution of Limited Partnerships
If until now you haven’t encountered a case involving the “equitable” dissolution of a partnership, join the club. Find out more in this week’s New York Business Divorce which highlights a recent decision by Justice Stephan Bucaria in a 10-year litigation among the general partners of several limited partnerships governed by the outmoded Uniform Limited Partnership Act.
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LLC Agreement Falters from Dueling “Notwithstanding” Clauses
Shareholder and LLC agreements, like other contracts, frequently contain terms accompanied by the proviso, “notwithstanding anything to the contrary in this Agreement,” signaling that the term trumps all others. Read this week’s New York Business Divorce to learn about a recent First Department appellate ruling in Schepisi v. Roberts highlighting the mischief that can result from multiple, ” dueling” notwithstanding clauses.
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Recent Appellate Rulings Address Demand Futility in Derivative Lawsuits
Derivative claims are frequently asserted in business divorce litigation. Within the last two months the Manhattan-based Appellate Division, First Department, issued three decisions addressing the demand futility requirement in derivative lawsuits involving Delaware and New York corporations, limited partnerships and LLCs. Get up to speed with this week’s New York Business Divorce.
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Successful Common-Law Dissolution Case Survives Appeal, But Remedy Limited to Buy-Out
Common-law dissolution makes another rare appearance in a recent appellate ruling by the First Department in Gjuraj v. Uplift Elevator, which may be the only reported common-law dissolution case in which a plaintiff won at trial. Don’t miss it in this week’s New York Business Divorce.
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How Should Courts Maximize Shareholder Value When Dissolving Deadlocked Companies?
The decision highlighted in this week’s New York Business Divorce may not be new, but it is one that deserves serious attention as a possible remedial template in deadlock dissolution cases, where one 50% owner with operational control uses it as a sword to force the other 50% owner to accept an under-valued buyout.
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A Potpourri of Procedural Issues in Dissolution Cases
Disputes over procedural issues are no less common in dissolution proceedings — and with consequences no less important — than in other types of civil litigation. This week’s New York Business Divorce samples a number of recent court decisions highlighting an array of procedural issues that come up in dissolution cases.
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Action to Enjoin LLC Freeze-Out Merger Goes Forward
Decisions in lawsuits brought by minority members challenging LLC mergers are rare finds. This week’s New York Business Divorce highlights a recent decision in just such a case by Manhattan Commercial Division Justice Melvin Schweitzer, in which he denied a motion to dismiss an action seeking to set aside a merger involving a realty management company organized as a three-member LLC. You won’t want to miss it.
Continue Reading Action to Enjoin LLC Freeze-Out Merger Goes Forward