What happens when you cross an at-will employment agreement with a mandatory redemption requirement at a deeply discounted price? Find out in this week’s post.
Continue Reading At-Will Employment Agreement Plus Mandatory Redemption Clause Leaves Minority Shareholder-Employees Out in the Cold
This week’s post discusses what happens when shareholders of a Professional Corporation retire without an agreement governing the redemption of their shares.
Continue Reading Must a Professional Corporation Redeem the Shares of its Retired Shareholders?
This week’s New York Business Divorce offers a trifecta of sorts, offering summaries of three recent decisions, one involving an LLC, another a partnership, and another a close corporation.
Continue Reading Recent Decisions Enforce LLC Member’s Right of First Refusal, Restrict Partnership Accounting, and Allow Damages Claim for Breach of Oral Shareholders Agreement
When a shareholder petitions for dissolution, many states have statutes allowing the corporation to respond by buying out the complaining shareholder. This week’s post takes a look at several recent decisions concerning buyout elections across the country.
Continue Reading A Cross-Country Road Trip of Elections to Purchase in Dissolution Proceedings
Most practitioners believe the summary judgment in lieu of complaint statute, CPLR 3213, applies just to contracts involving loans or other indebtedness. Not so. In a recent decision, a Manhattan Commercial Division Justice granted summary judgment in lieu of complaint, entering a money judgment for nearly $35 million, based upon a seldom litigated provision of the statute permitting accelerated treatment “upon any judgment” – in this case, a prior declaratory judgment. Read about the Court’s novel approach to summary judgment in lieu of complaint in this week New York Business Divorce.
Continue Reading Summary Judgment in Lieu of Complaint Meets Business Divorce
This week’s post considers a recent decision from New York County Commercial Division Justice Borrok, who offers well-reasoned guidance on the separateness between claims to specifically enforce a buy-sell agreement, on the one hand, and damages claims, on the other.
Continue Reading Never the Twain Shall Meet: Damages Claims Do Not Offset the Purchase Price in Buy-Sell Agreements
In this week’s New York Business Divorce, read about the history and development of case law in New York over the past 25 years holding potentially void as against public policy provisions in partnership, shareholders, and operating agreements barring closely-held business owners from petitioning courts to dissolve the entity.
Continue Reading Anti-Dissolution Provisions and Public Policy
This week’s post considers a duo of recent decisions concerning disputes between LLC members over the terms of their operating agreement. In the first case, the court considered whether to enforce an operating agreement as written despite evidence that the parties actually intended a different deal. In the second, the court considered whether to enforce an operating agreement where its buyout terms were grossly unfair. The cases’ different outcomes highlight the outer limits of the parties’ freedom of contract in LLC operating agreements.
Continue Reading The Operating Agreement Controls, Unless Public Policy Says Otherwise
In this week’s New York Business Divorce, we consider a recurring problem with LLC operating agreements: enforceability of the writing when it is unexecuted or partially executed. A growing body of case law finds such agreements at least potentially enforceable absent an expression of intent to the contrary. Read about that issue, and related issues of due execution of operating agreements, in this week’s New York Business Divorce.
Continue Reading Cooked or Raw? Enforceability of Partly Signed Operating Agreements
The Court of Appeals’ decision in Pappas v. Tzolis was one of three opinions by that court in 2011-12 that reset the bargaining table when controlling owners of closely held companies buy out minority equity holders. A ruling earlier this year by the Appellate Division, First Department, involved a shareholder dispute with an interesting twist on the fact pattern in Pappas. Find out more in this week’s New York Business Divorce.
Continue Reading Appellate Ruling Puts Pappas v. Tzolis to the Test