A long-running litigation battle between a technology and marketing company and its minority shareholder investors took yet another twist last week when the Appellate Division, First Department, reversed a lower court order upholding the company’s cancellation of the minority shares and the loss of their preemptive rights. Get the full story in this week’s New York Business Divorce.
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Breaking Up Badly
It’s a familiar story: Business partners have a falling out, and without the assistance of counsel prepare and sign on their own a written agreement that almost inevitably creates more problems than it solves. This week’s New York Business Divorce highlights a recent decision by Manhattan Justice Carol Edmead in which she
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Court Permits Freeze-Out Merger on Eve of Trial of Shareholder Derivative Action
A shareholder’s derivative action alleging misappropriation and waste by the controlling shareholders, filed in 2009, was scheduled for trial earlier this month. About three weeks before trial, the controlling shareholders initiated a freeze-out merger for the specific purpose of defeating the suing shareholder’s standing to maintain the action. Did it work? Find out in this week’s New York Business Divorce.
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Is Bad Faith a Defense in Deadlock Dissolution Proceedings?
Does the petitioner’s bad faith matter in a deadlock dissolution case when the relationship between the 50/50 owners has broken down irreconcilably? Justice Vito DeStefano recently tackled the question in Feinberg v. Silverberg in an important ruling that is likely to be cited in other cases. Read more in this week’s New York Business Divorce.
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Gaming the Venue Game in Dissolution Cases
A recent decision by Justice Timothy S. Driscoll in Matter of Yahudaii dealt with a dissolution petitioner’s attempt to pursue his case in another county by amending the certificate of incorporation. Did it work? Find out in this week’s New York Business Divorce.
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With Sir Blackstone’s Help, Court Thwarts Minority Shareholder’s Effort to Block 1031 Exchange
A realty corporation seeks to sell its sole asset and buy a replacement property as part of a tax-deferred 1031 exchange. Is the sale in furtherance of the corporation’s business purpose, or is it a liquidation requiring shareholder approval and potentially triggering appraisal rights? That was the issue posed in a recent ruling by Justice Melvin Schweitzer in Theatre District Realty Corp. v. Appleby, feaured in this week’s New York Business Divorce.
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Do Not Pass Go: Court Rejects Assignment of Limited Partner’s Economic Interest
A recent decision by Manhattan Commercial Division Justice Barbara Kapnick addressed the interplay between anti-assignment provisions in a limited partnership agreement and statutory rights of assignment under New York’s Uniform Limited Partnership Act. Get the full story in this week’s New York Business Divorce.
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How Much is That Pastrami in the Window? Court Determines Fair Value of Kosher Deli
Pastrami, corned beef, and valuation were on the menu in Ruggiero v. Ruggiero, decided last month by Justice Emily Pines in a case pitting the widow of one brother against the surviving brother in a contested buy-out of shares in a kosher deli business. This week’s New York Business Divorce highlights the court’s discussion of the conflicting expert business appraisals.
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LLC’s Quick Success Breeds Mutual Misbehavior in Delaware Case
Is an LLC membership interest forfeited or reduced when a member fails to make a required capital contribution? That was the threshold issue in a decision last week by the Delaware Chancery Court in Grove v. Brown, where the LLC’s financial success in its first year led to acrimony and litigation. Get the answer in this week’s New York Business Divorce.
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Summer Shorts: The Excluded LLC Member and Other Decisions of Interest
This week’s New York Business Divorce offers some “summer shorts” consisting of summaries of three recent decisions of interest by Justices Orin Kitzes, Stephen Bucaria and Ellen Coin featuring involving exclusion of a minority LLC member seeking dissolution, a request for injunctive relief pending the trial of a corporate dissolution case, and a cmplaint seeking profit share following the revocation of an LLC membership purchase agreement.
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