A recent and controversial decision by the Delaware Chancery Court highlights the need for counsel drafting multiple-member LLC operating agreements to focus attention on whether, and if so the circumstances under which, a member may transfer its membership interest, including economic and voting rights, to another existing member with or without the other members’ consent. Learn more about this important case law development in this week’s New York Business Divorce.
Continue Reading Avoiding the Pain of Achaian, or How Not to Draft LLC Membership Transfer Provisions
Deadlock Over Voluntary Dissolution Agreement Leads to Involuntary Judicial Dissolution
Is the statutory remedy of judicial dissolution available when shareholders fail to implement a prior agreement for a voluntary winding up and dissolution? Nassau County Justice Stephen A. Bucaria answers the question in Matter of Toledano (Home Tower Group, Inc.), featured in this week’s New York Business Divorce.
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Court Endorses Discounted Cash Flow Method, Rejects Post-Merger Tax Benefits, in Determining Fair Value Award to Dissenting Shareholder
Stock valuation aficionados will not want to miss the report in this week’s New York Business Divorce on the recent decision in Matter of Harlem River Yard Ventures, Inc. It’s a dissenting shareholder case triggered by a squeeze-out merger in which the court was faced with widely disparate expert valuations of a company holding a 99-year lease on the Bronx site of the former Penn Central rail yards, now serving as an industrial park.
Continue Reading Court Endorses Discounted Cash Flow Method, Rejects Post-Merger Tax Benefits, in Determining Fair Value Award to Dissenting Shareholder
Beware Taxes on Phantom Income When Entering Into Shareholder Buy-Out Agreement
Tax analysis is a critical part of the business divorce attorney’s job when it comes to fashioning a shareholder buy-out agreement that, among other things, protects the selling shareholder from personal income tax liability on non-distributed or “phantom” net income that later may show up on the shareholder’s Schedule K-1. This week’s New York Business Divorce looks at a recent decision by Manhattan Supreme Court Justice Judith Gische in a fight over the tax consequences of a buy-out settlement of a corporate dissolution.
Continue Reading Beware Taxes on Phantom Income When Entering Into Shareholder Buy-Out Agreement
Summer Shorts: Stock Sale Under Duress 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 Carolyn E. Demarest and a split decision by the Appellate Division, First Department.
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625 Reasons Why New York Lags in LLC Formations
Why is New York near the bottom of the pack in the U.S. when it comes to the popularity of the limited liability company as the choice of entity for new businesses? A new statistical study concludes that New York’s formation fees, and particularly its expensive requirement for newspaper publication of LLC formations, is the reason. Read more in this week’s New York Business Divorce.
Continue Reading 625 Reasons Why New York Lags in LLC Formations
Member of Real Estate LLC Never Withdrew, Held Entitled to Share of Sale Proceeds
It’s one thing to claim that someone never became a member of an LLC, it’s another to claim that an admitted LLC member later withdrew. Justice Stephen Bucaria addresses the latter claim in his recent decision in Gitlin v. Chirinkin, featured in this week’s New York Business Divorce.
Continue Reading Member of Real Estate LLC Never Withdrew, Held Entitled to Share of Sale Proceeds
The Marketability Discount in Fair Value Proceedings: An Emperor Without Clothes?
The discount for lack of marketability is a fixture in New York fair value jurisprudence as a result of almost 30 years of case law starting with Matter of Blake. Some prominent voices in the business valuation field are challenging the doctrine as wrong in theory and bereft of empirical support. Learn more in this week’s New York Business Divorce.
Continue Reading The Marketability Discount in Fair Value Proceedings: An Emperor Without Clothes?
What It Means to Be a Business Divorce Lawyer
This week’s New York Business Divorce reflects on what it means to be a business divorce lawyer.
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There’s No Need for Publication Notice of LLC Judicial Dissolution Proceedings
The statute governing LLC dissolution proceedings, unlike the one for corporations, does not require publication notice at the start of the case. So why do we still see LLC dissolution show cause orders requiring expensive publication? This week’s New York Business Divorce takes a look.
Continue Reading There’s No Need for Publication Notice of LLC Judicial Dissolution Proceedings