Advancement and Indemnification

In this week’s New York Business Divorce, we tackle one of the most spectacular and well-publicized business falling-outs of modern times: Michael D. Cohen’s departure from the Trump Organization LLC, his resulting criminal conviction, and his cooperation with the Federal Government’s various investigations into activities surrounding former President Trump J. Trump. As an alleged former officer of the Trump Organization, Cohen sued the company for indemnification under its operating agreement for millions of dollars in legal fees resulting from the sprawling array of civil, administrative, and criminal proceedings against him. Learn how Cohen’s claims were resolved in this week’s New York Business Divorce.
Continue Reading The Outer Limits of LLC Indemnification: Michael Cohen v Trump Organization

It’s no match for Jarndyce v. Jarndyce, but 15 years is some sort of record for litigating the breakup of a single-asset real estate partnership during which one of the partners died, triggering the other’s option to purchase under a fixed-price formula. Read about it in this week’s New York Business Divorce.
Continue Reading A Partnership Dissolution in Three Acts Over Fifteen Years and Counting

George Costanza would be unhappy to hear about an Appellate Division decision last week affirming a trial court ruling, among others of interest in an LLC appraisal proceeding, in which it rejected as “double dipping” a request for post-valuation date income distributions on top of the fair value award. Learn more in this week’s New York Business Divorce.
Continue Reading No Double Dipping! Court Denies Post-Valuation Date Distributions in Equitable Buyout of LLC Member

New York law imposes some strict limits on the ability of closely-held business owners and fiduciaries to recover advancement and indemnification of their legal fees from the entity in defense of derivative actions and other business divorce disputes. When advancement rights are abused, there are ways for minority owners to fight back. Read on in this week’s New York Business Divorce.
Continue Reading Can the Company Pay My Legal Fees? – Part Two

In its ruling last week in Carr v Global Payments Inc., the Delaware Court of Chancery had to decide whether to reverse its prior order requiring advancement of a former corporate officer’s litigation expenses after the company subsequently amended its complaint in the underlying suit for the precise purpose of avoiding advancement. Find out what happened in this week’s New York Business Divorce.
Continue Reading Advance! Amend! Retreat!

Is a former director and officer entitled to advancement of legal fees incurred in the defense of legal claims asserted against her by the corporation? That was the question decided by VC Glasscock of the Delaware Chancery Court in a case where the corporate charter’s indemnification and advancement provisions were not a model of clarity.
Continue Reading Ambiguous Advancement Provision Favors Former Officer and Director

This week’s New York Business Divorce offers its annual Winter Case Notes with synopses of half a dozen recent decisions in business divorce cases involving minority shareholder oppression, books and records proceedings, and more.
Continue Reading Winter Case Notes: Oppression of the “Gifted” Minority Shareholder and Other Recent Decisions of Interest

Merit-based bonuses protected by the business judgment rule, or de facto dividends? That was the central question on which depended the outcome of a common-law dissolution claim in a case decided last month by a New York appellate panel involving a family-owned business. Learn more in this week’s New York Business Divorce.
Continue Reading Past is Prologue: Refusal to Adopt Dividend Policy After Petitioner Resigns Not Ground for Dissolution

This week’s New York Business Divorce revisits a family feud involving a Brooklyn-based food distributor and affiliated realty company, in which an ousted minority owner was on the short end of a series of recent decisions by Justice Sylvia Ash.
Continue Reading “Food Fight” Sequel Ends Badly for Ousted Sibling