The New York Court of Appeals heard oral argument this month of an appeal from the Appellate Division, First Department’s split decision in Pappas v. Tzolis pitting fiduciary duty against contractual waiver in the context of an intra-member buy-out of LLC membership interests. This week’s New York Business Divorce provides highlights of the oral argument and links to the argument’s webcast, the parties’ briefs, and other background materials.
Continue Reading Does Waiver Trump Fiduciary Duty? Court of Appeals Hears Argument in Pappas v. Tzolis
Too Late Gets Too Little: LLC Minority Member Fails to Block Merger, Must Accept $465 Buy-Out
The historic Bulova watchcase factory in picturesque Sag Harbor, NY, is the focus of a legal battle between co-developers that led to a decision earlier this month upholding a merger that left one of the developers in the cold, holding a check for $465.60 for its interest. Read more in this week’s New York Business Divorce.
Continue Reading Too Late Gets Too Little: LLC Minority Member Fails to Block Merger, Must Accept $465 Buy-Out
Case Illustrates Power of Constructive Trust to Establish Stock Ownership
The equitable remedy of constructive trust comes to the rescue of a minority shareholder in a family-owned business in Quadrozzi v. Estate of Quadrozzi, decided last week by the Appellate Division, Second Department. It’s in this week’s New York Business Divorce.
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New Jersey Adopts Revised LLC Act Authorizing Dissolution for Minority Oppression
New Jersey recently became the eighth state to adopt the Revised Uniform Limited Liability Company Act including a new provision authorizing judicial dissolution of LLCs on the ground of oppressive acts by the controllling managers or members and also providing a statutory buy-out remedy, much like the dissolution statutes governing close corporations. For more on the new statute’s background, its provisions, and the surrounding policy debate, read this week’s New York Business Divorce.
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Arbitration Award in Stock Buy-Out Dispute Withstands Challenge
This week’s New York Business Divorce examines a recent decision by Justice Carolyn E. Demarest in Pisane v. Feig, where the court confirmed an arbitration award stemming from a petition for judicial dissolution of several affiliated companies, in which the arbitrator decided which of the two parties was entitled to buy out the other, and at what price.
Continue Reading Arbitration Award in Stock Buy-Out Dispute Withstands Challenge
Court Rejects Marketability Discount in LLC Fair Value Case
In the second of two posts on the recent post-trial decision in Chiu v. Chiu, involving the disputed ownership of a single-asset real estate holding company, this week’s New York Business Divorce focuses on the court’s rejection of a discount for lack of marketability in determining the fair value of the withdrawing member’s 10% interest.
Continue Reading Court Rejects Marketability Discount in LLC Fair Value Case
Court Recasts Advances as Capital Contributions in Determining LLC Members’ Ownership Percentages
This week’s New York Business Divorce revisits the fascinating case of Chiu v. Chiu on the occasion of a post-trial decision by Justice Allan Weiss in this long-running battle between two brothers over the ownership and valuation of a real estate holding company. Don’t miss it!
Continue Reading Court Recasts Advances as Capital Contributions in Determining LLC Members’ Ownership Percentages
When Can LLC Members Act Without Holding a Meeting?
Compared to its Business Corporation Law, New York’s LLC Law provides greater latitude to LLC members when it comes to making management decisions without necessity of holding a formal meeting. A recent Delaware Chancery Court decision construing that state’s similar LLC statute sheds light on the interplay between the statutory default rule and operating agreement provisions that set forth voting procedures without mention of the members’ right to take action without a meeting. It’s in this week’s New York Business Divorce.
Continue Reading When Can LLC Members Act Without Holding a Meeting?
Summer Shorts: Liquidating Receiver’s Authority to Compel Share Redemption and Other Recent Decisions of Interest
This week’s New York Business Divorce offers some “summer shorts” consisting of summaries of three recent decisions of interest including two by Justice Timothy Driscoll and another by Justice David Schmidt, featuring disputes over a liquidating receiver’s sale of the dissolved corporation’s real property and the requirements for pleading derivative claims.
Continue Reading Summer Shorts: Liquidating Receiver’s Authority to Compel Share Redemption and Other Recent Decisions of Interest
Court Invalidates Father-Son Stock Transfer Under Right of First Refusal
“I’ll sell you my shares, but you’ll have to take my job, too.” That’s the upshot of a recent decision by Commercial Division Justice Elizabeth H. Emerson, holding that a right of first refusal in a shareholders’ agreement required any third-party buyer to assume the selling shareholder’s job responsibilities, and on that basis invalidating a minority shareholder’s attempt to sell his shares to his father. Learn more in this week’s New York Business Divorce.
Continue Reading Court Invalidates Father-Son Stock Transfer Under Right of First Refusal