Matter of Youngwall, in which Justice Stephen Bucaria last March dissolved an unprofitable LLC owned by two brothers, makes another appearance in this week’s New York Business Divorce, this time focusing on the court’s recent decision denying a motion for reconsideration.
Continue Reading Further Thoughts on Youngwall and Judicial Dissolution of the Unprofitable LLC
WWDD (What Would Delaware Do) With an In Terrorem LLC Dissolution Waiver Clause?
Two courts, one in Delaware and the other in New York, are asked to enforce operating agreements waiving the right to seek judicial dissolution of an LLC. Only one of them says “yes.” Can you guess which one? Get the answer in this week’s New York Business Divorce.
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Mandatory Arbitration of Dissolution Proceedings
Do broad arbitration clauses in shareholders’ agreements mandate arbitration of petitions for involuntary corporate dissolution? Find out in this week’s New York Business Divorce.
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Controlling Shareholder’s Dilution of Minority Interest Requires Bona Fide Business Purpose
This week’s New York Business Divorce looks at a recent decision by Justice Herman Cahn addressing the fiduciary duties of a controlling shareholder who authorizes and issues additional shares to himself without offering the same opportunity to minority shareholders.
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Divided Appeals Court Upholds Removal of LLC Member-Manager Contrary to Voting Agreement
A divided panel of the Appellate Division, First Department last week upheld the removal of an LLC member-manager by majority vote of the members, notwithstanding a provision in the operating agreement requiring all members to vote for the ousted manager in any election. Learn more in this week’s New York Business Divorce.
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Courts Differ on Application of Marketability Discount in Stock Valuation Proceedings
New York courts generally will apply a discount for lack of marketability in valuing the shares of closely held corporations in buyout proceedings triggered by judicial dissolution. Whether the discount applies only to goodwill, or to the entire enterprise value, may depend on which court you’re in. Find out more in this week’s New York Business Divorce.
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De Facto Dissolution of LLC Does Not Terminate Members’ Fiduciary Duty or Avoid Accounting for Subsequent Profits
The Appellate Division, Third Department, has ruled that an LLC member’s fiduciary duties continue even after the de facto break-up of the company. Read about this important decision in this week’s New York Business Divorce.
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Delaware and New York Courts Agree that 50% LLC Member May Not Hire Lawyer to Represent Company Adverse to Other 50% Member
There’s been a spate of recent court decisions concerning the authority of one 50% business owner to hire counsel to represent the company adverse to the other 50% owner. This week’s New York Business Divorce looks at two new decisions, one from New York and one from Delaware.
Continue Reading Delaware and New York Courts Agree that 50% LLC Member May Not Hire Lawyer to Represent Company Adverse to Other 50% Member
Court Discounts Fair Value Award for Built-In Gains Tax in Shareholder Oppression Case
Justice Ira Warshawsky of Nassau County Supreme Court’s Commercial Division has issued a “BIG” decision (as in discount for Built-In Gains tax) in a stock valuation arising out of a dissolution proceeding brought by minority shareholders claiming oppression. Read about it in this week’s New York Business Divorce.
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Court Orders Return of Investment as Equitable Remedy in LLC Dissolution Proceeding
A post-trial decision by Westchester Supreme Court Justice Alan Scheinkman tackles a novel remedial issue in an LLC dissolution involving 50-50 partners who went from friendship to fisticuffs over their vending machine business. Read about it in this week’s New York Business Divorce.
Continue Reading Court Orders Return of Investment as Equitable Remedy in LLC Dissolution Proceeding