Two feuding 50-50 shareholders enter a buy-sell option agreement in which either one can offer his shares to the other at a fixed price and, if the offer is declined, the corporation is voluntarily dissolved. One of them later offers his shares. The other declines. Sounds like simple plan to avoid a messy court battle, right? Not quite, as you’ll find out in this week’s New York Business Divorce discussing a recent decision by Justice Ira Warshawsky.
Continue Reading Court Grants Dissolution, Rejects Claim that Failed Buy-Sell Agreement Was “Ploy” by Petitioner to Take Over Corporation’s Retail Store Lease for His New Business
Court Permits Direct Rather Than Derivative Recovery in Post-Dissolution Action Against Controlling Shareholder for Misappropriation of Assets Held by Second Corporation Found to be “Mere Continuation” of Dissolved Corporation
Internecine litigations involving family-owned close corporations generate some of the murkiest fact patterns and knottiest legal issues known to the courts. This week’s New York Business Divorce looks at one such case, recently decided by Justice Bernard J. Fried, involving a family fight over a dissolved corporation, a second corporation with the same name,and real estate sale proceeds.
Continue Reading Court Permits Direct Rather Than Derivative Recovery in Post-Dissolution Action Against Controlling Shareholder for Misappropriation of Assets Held by Second Corporation Found to be “Mere Continuation” of Dissolved Corporation
A Tale of Two Preliminary Injunction Applications in Corporate Dissolution Cases Decided Three Days Apart, Same Issue, Same Judge, Different Outcomes
The grant or denial of preliminary injunctive relief at the outset of a dissolution proceeding can make a critical difference in the events that follow. This week’s New York Business Divorce looks at two back-to-back decisions by Justice Orin Kitzes, one denying and one granting injunctive preliminary relief, in cases that otherwise have a lot in common.
Continue Reading A Tale of Two Preliminary Injunction Applications in Corporate Dissolution Cases Decided Three Days Apart, Same Issue, Same Judge, Different Outcomes
Majority Shareholders of Accounting Firm Held Liable for Value of Deceased Minority Shareholder’s Interest After They Formed New Firm Using Old Firm’s Assets and Good Will
Did you know that the Surrogate’s Court has jurisdiction over corporate dissolution proceedings involving the estate of a deceased shareholder? Read more in this week’s New York Business Divorce highlighting a recent appellate decision affirming an award in favor of the estate of a minority shareholder arising from a petition for judicial dissolution of an accounting firm.
Continue Reading Majority Shareholders of Accounting Firm Held Liable for Value of Deceased Minority Shareholder’s Interest After They Formed New Firm Using Old Firm’s Assets and Good Will
No Exception to Arbitration for Deadlock Dissolution Petition, Court Rules
There is nothing “unique” or “even unusual” about deadlock dissolution cases that place them outside the scope of a broad arbitration clause in a shareholders’ agreement, rules Justice Ira Warshawsky in a recent decision featured in this week’s New York Business Divorce.
Continue Reading No Exception to Arbitration for Deadlock Dissolution Petition, Court Rules
Appellate Court Affirms Caplash Ruling Rejecting Authority of 50% LLC Member to Hire Company Counsel in Proceedings Against Other 50% Member
The hiring by one 50% business owner of legal counsel to take action in the company’s name against the other 50% owner is a frequent source of litigation. This week’s New York Business Divorce revisits the Caplash case, which involved this issue in the LLC context, on the occasion of a new decision by the Appellate Division, Fourth Department, affirming rulings by Justice Kenneth Fisher.
Continue Reading Appellate Court Affirms Caplash Ruling Rejecting Authority of 50% LLC Member to Hire Company Counsel in Proceedings Against Other 50% Member
Appellate Ruling in Stock Valuation Case Further Muddies the Marketability Discount Waters
Stock valuation junkies, this week’s New York Business Divorce is for you, as we examine a recent Fourth Department decision that weighs in on the controversial issue whether the discount for lack of marketability applies only to the company’s good will or to the entire enterprise value.
Continue Reading Appellate Ruling in Stock Valuation Case Further Muddies the Marketability Discount Waters
Appellate Rulings Clash Over Subject Matter Jurisdiction to Dissolve Foreign Business Entities
A decision last week by the Second Department highlights a split of authority among New York’s intermediate appellate courts whether New York courts have subject matter jurisdiction over petitions to dissolve foreign business entities. Learn more in this week’s New York Business Divorce.
Continue Reading Appellate Rulings Clash Over Subject Matter Jurisdiction to Dissolve Foreign Business Entities
Court Grants 50% LLC Member’s Petition for Judicial Dissolution of Passive Holding Company
This week’s New York Business Divorce features a recent decision by Justice Bernard Fried granting dissolution of an LLC owned 50-50 by two members locked in several highly contentious lawsuits. The decision addresses standing of a membership interest assignee to seek dissolution, and whether deadlock can establish ground for dissolution of a passive investment holding company.
Continue Reading Court Grants 50% LLC Member’s Petition for Judicial Dissolution of Passive Holding Company
Can Corporate Dissolution Proceedings Be Brought in Federal Court?
Can corporate dissolution cases be brought in federal court when there’s diversity of citizenship among the shareholders and the corporation? Get the answer in this week’s New York Business Divorce.
Continue Reading Can Corporate Dissolution Proceedings Be Brought in Federal Court?