In two recent decisions, courts in Delaware and New York addressed obligations of non-managing members of LLCs to maintain the confidentiality of company trade secrets. These cases provide important lessons for attorneys who prepare LLC operating and employment agreements. It’s in this week’s New York Business Divorce.
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Are LLC Organizers Fiduciaries?
The Appellate Division, First Department, broke new ground with a controversial decision earlier this month holding that LLC organizers owe a fiduciary duty when soliciting members. Read about it in this week’s New York Business Divorce.
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Appellate Court Rejects Mandatory Stock Buyback Triggered by Dissolution Petition
This week’s New York Business Divorce revisits an important topic, involving mandatory stock buybacks triggered by the filing of a dissolution petition, prompted by a recent decision by an upstate appellate court in Matter of Stevens (Allied Builders, Inc.).
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The Stakes Just Went Up for Failing to Update Certificate of Value
Many shareholder and operating agreements provide redemption rights at a price stated in an appended certificate of value which is supposed to be updated periodically but often is not. A recent decision by Justice Stephen A. Bucaria addresses potential liability when the certificate of value is not timely updated. Learn more in this week’s New York Business Divorce.
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Ruling on Valuation Discounts for Marketability, Built-In Gains Tax Ends Rift Among New York Appellate Courts
The Appellate Division, Second Department last week affirmed the key rulings by Justice Ira Warshawsky in the Murphy v. U.S. Dredging valuation case, including his application of a marketability discount to entire enterprise value rather than limiting it to good will. Learn more in this week’s New York Business Divorce.
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Statistics Show New York Lagging in the LLC Revolution
The venerable, closely-held business corporation may be on its last legs. Looking at some recently published statistics on new entity filings, it’s clear that the young upstart, the limited liability company, has already far surpassed its elder. So why does New York lag behind the rest of the country in the LLC revolution? It’s in this week’s New York Business Divorce.
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Statute Constrains Commissions for Court-Appointed Receivers in Corporate Dissolution Proceedings
An appellate decision this month, in Matter of Eklund Farm Machinery, Inc., spotlights anew the inadequate statutory compensation scheme governing court-appointed receivers in corporate dissolution proceedings. It’s in this week’s New York Business Divorce.
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Court Denies Arbitration of Corporate Dissolution Petition Notwithstanding Broad Clause
Courts generally will enforce broad arbitration clauses in shareholders’ agreements to compel arbitration of corporate dissolution disputes. This week’s New York Business Divorce highlights an interesting, recent decision by Justice Ira B. Warshawsky in which he denied a request to compel arbitration of a dissolution petition based on limiting language in a separate termination clause in the shareholders’ agreement.
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Business Divorce, American Chopper Style
Have you heard about the episode of American Chopper in which Paul Sr. and Paul Jr. rev up their litigators and duke it out in the courtroom in a shareholder dispute? You will in this week’s New York Business Divorce.
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Dissenting Shareholder Stock Appraisal Triggered by Freeze-Out Merger Raises Issue of Post-Merger Tax Consequences for C Corporation with Built-In Gains
Stock valuation junkies can get their fix in this week’s New York Business Divorce, as it revisits the issue of discounts for BIG — as in built-in capital gains taxes — in the appraisal of C corporation shares under the fair value standard, prompted by a decision last week by a Manhattan appeals court in a case called Matter of Mandelbaum.
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