A majority shareholder’s breach of fiduciary duty owed a minority shareholder may constitute oppressive action within the meaning of the judicial dissolution statute. But does oppressive conduct constitute breach of fiduciary duty? A recent federal court decision suggests so, but is it right? Read this week’s New York Business Divorce and see for yourself.
Continue Reading Fiduciary Breach Can Result in Shareholder Oppression, But Is Shareholder Oppression a Breach of Fiduciary Duty?
Court Orders Hearing On Minority Shareholder’s Petition for Common Law Dissolution
Common law dissolution is something of a remedy of last resort for the oppressed minority shareholder who does not hold the requisite 20% of the corporation’s voting shares to bring a dissolution proceeding under BCL Section 1104-a. This week’s New York Business Divorce highlights a recent decision by Queens County Commercial Division Justice Orin Kitzes ordering a hearing to determine a common law dissolution petition brought by 15% shareholders of a restaurant business.
Continue Reading Court Orders Hearing On Minority Shareholder’s Petition for Common Law Dissolution
Mediation and Business Divorce: Interview with Mediator Leona Beane
Mediation has become an important and increasingly popular alternative path to dispute resolution. This week’s New York Business Divorce features an interview with former law professor turned mediator Leona Beane on the subject of the mediation of business divorce cases.
Continue Reading Mediation and Business Divorce: Interview with Mediator Leona Beane
Winning the Dissolution Battle, Losing the War
When a claim for judicial dissolution is denied or otherwise drops out of the case, that doesn’t necessarily mean the case is over. This week’s New York Business Divorce discusses two recent decisions by Justices Patricia Satterfield and Shirley Werner Kornreich in which the side opposing dissolution prevailed but left unresolved other claims addressing the parties’ underlying differences.
Continue Reading Winning the Dissolution Battle, Losing the War
Pay Attention to the Latent Power of Corporate Bylaws
Corporate bylaw provisions governing the number of directors and procedures for their appointment can sometimes play a critical role in the outcome of disputes among shareholders of closely held corporations, as illustrated in a recent case highlighted in this week’s New York Business Divorce involving a small residential co-op.
Continue Reading Pay Attention to the Latent Power of Corporate Bylaws
What’s the Difference Between Marketability and Minority Discounts?
Valuation discounts are among the most hotly contested issues in minority shareholder buy-out proceedings triggered by dissolution petitions. As between the discount for lack of marketability and the minority discount (a/k/a discount for lack of control), New York case law allows one of them and prohibits the other. Do you know which is which? Find out in this week’s New York Business Divorce.
Continue Reading What’s the Difference Between Marketability and Minority Discounts?
Nominee Agreement Trumps Corporation Records in Fight Over Stock Ownership
This week’s New York Business Divorce features a recent decision by the Appellate Division, Second Department, reversing the denial of a preliminary injunction centering on the enforceability of a written Nominee Agreement which acknowledged Party A as the “true owner” of a 50% stock interest in the corporation and appointed as his nominee Party B who otherwise was reflected as 100% owner in all of the corporation’s records and tax filings.
Continue Reading Nominee Agreement Trumps Corporation Records in Fight Over Stock Ownership
Court Enjoins “Squeeze-Out” Capital Call by Controlling Members of LLC
The baseball season is upon us but there’s no joy in Mudville or, at least, at the Cooperstown All Stars Village baseball camp where the co-owners of a limited liability company are playing hardball litigation. The Third Department umpire recently called a preliminary injunction in favor of the non-controlling team after the controlling member pitched a high-and-inside capital call. Read about it in this week’s New York Business Divorce.
Continue Reading Court Enjoins “Squeeze-Out” Capital Call by Controlling Members of LLC
New Jersey Courts Apply State’s Dissolution Statute to Foreign Corporations: Can it Happen in New York?
A pair of recent decisions by New Jersey courts permits corporate dissolution petitions under that state’s law for foreign corporations based in New Jersey. Would such a petition succeed in New York? Discover the answer in this week’s New York Business Divorce.
Continue Reading New Jersey Courts Apply State’s Dissolution Statute to Foreign Corporations: Can it Happen in New York?
Undocumented Stock Interests Invite Challenges to Standing in Corporate Dissolution Cases: Part Three
In the last of a three-part series on disputes over stock ownership in corporate dissolution cases, this week’s New York Business Divorce examines a case decided by New York County Justice Lewis Bart Stone involving a fight between three family members, each of whom took a different position over the ownership of the company shares.
Continue Reading Undocumented Stock Interests Invite Challenges to Standing in Corporate Dissolution Cases: Part Three