Advancement and Indemnification

This week’s New York Business Divorce features an important decision last month by Justice Vito DeStefano in which he upheld a claim for advancement of legal fees incurred by a close corporation minority shareholder, director and former officer, who initiated suit against the controlling shareholder, in defending counterclaims asserted in the name and right of the company.
Continue Reading Court Upholds Former Officer’s Right to Seek Indemnity and Advancement in Intra-Company Dispute

Tenant-shareholders in co-op apartments occasionally fall into the same kinds of internal disputes over corporate governance experienced by shareholders in any other kind of closely held corporation. This week’s New York Business Divorce highlights a recently decided battle for board seats among co-owners of a small Manhattan co-op, in which the outcome turned on the court’s construction of arguably out-of-sync provisions in the by-laws and shareholders’ agreement.
Continue Reading Legal Battle Over Board Seats Splits Neighbors in Manhattan Co-op

Justice Stephen Bucaria’s recent decision in PFT Technology LLC v. Wieser is one of only a handful of rulings by New York courts addressing the right to advancement of legal fees in litigation among members of a limited liability company. Learn more in this week’s New York Business Divorce.
Continue Reading Novel Ruling on Advancement in LLC Dissolution Case “Levels the Playing Field”

A noteworthy decision last week by Justice Carolyn Demarest is featured in this week’s New York Business Divorce. The case, involving a fight between sibling co-owners of a food distributor and a separate realty company, addresses important issues concerning the scope of a general release and LLC members’ right to advancement of legal defense costs.
Continue Reading Court Limits Scope of Release, Denies Advancement of Defense Costs in Sibling “Food Fight”

The Appellate Division, First Department, has ruled consistent with Delaware law that an LLC manager’s right to indemnification of legal expenses in winning dismissal of one action need not await resolution of a second action raising the same claims. This week’s New York Business Divorce explains.

Continue Reading Following Delaware Precedent, New York Appeals Court Rules that Indemnification of LLC Managers for Successful Defense in First Action Need Not Await Resolution of Second, Related Litigation

The business partnership breakup and hydra-headed litigation known as Ficus Investments, Inc. v. Private Capital Management, LLC, is the subject of this week’s New York Business Divorce, as it looks at a recent, important ruling by Manhattan Commercial Division Justice Bernard Fried addressing rights of advancement and indemnification for litigation misconduct.

Continue Reading Do Advancement and Indemnification Rights Include Defense Costs of Litigation Misconduct After Officer Leaves Company?

The LLC Law authorizes a court to decree dissolution of a limited liability company “on application by or for a member.” Must the application be made by way of a complaint in an action or a petition in a special proceeding? How about by way of a motion or cross motion without a pleading? Find out how New York County Commercial Division Justice Bernard J. Fried answered these questions in a recent ruling featured in this week’s New York Business Divorce.

Continue Reading Application for Judicial Dissolution of LLC Must Be Made by Complaint or Petition, Mere Motion Will Not Suffice

This week’s New York Business Divorce highlights an important decision by the Appellate Division, First Department, construing rights of advancement and indemnification for litigation expenses in a battle royal between majority and minority members of a limited liability company.

Continue Reading New York Court Follows Delaware Law to Construe Advancement and Indemnification Provisions of Florida LLC’s Operating Agreement

This week’s New York Business Divorce looks at a recent case in which the managing member of an LLC, relying on the operating agreement’s indemnity provision, sought to sell company assets for various purposes including payment of her own legal fees to defend against an action brought by the other members to remove her as manager.

Continue Reading Indemnity Provision Can Tilt the Playing Field in Litigation Between Business Partners