Buy-sell agreements in shareholder agreements are supposed to avoid — not foment — litigation over the value of the interest being redeemed or sold. Matter of Grande’ Vie, LLC, decided last month by the Appellate Division, Fourth Department, tells a cautionary tale of a buy-sell provision gone wrong. Learn more about this important topic in this week’s New York Business Divorce.
Continue Reading Clash of the Clauses: Divided Appellate Panel Rules that “Binding” Appraisal Per Buy-Sell Agreement Must be Arbitrated
Buyout
Forensic Accounting Helps Wins the Day in Oppressed Shareholder Stock Valuation Proceeding
By Peter A. Mahler on
A recent decision by Queens County Commercial Division Justice Orin Kitzes in Matter of Adelstein illustrates the crucial role of forensic accounting in testing and adjusting a company’s financial statements for purposes of stock valuation in an oppressed minority shareholder case. Read more in this week’s New York Business Divorce.
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Continue Reading Forensic Accounting Helps Wins the Day in Oppressed Shareholder Stock Valuation Proceeding
An Ill-Fated Solution to an Ill-Fated Buy-Sell Agreement
By Peter A. Mahler on
An appellate ruling last month in DeMatteo v. DeMatteo Salvage Co. brings to a close the cautionary tale of an 8-year court battle among members of a family-owned business over the enforcement of a poorly designed buy-sell agreement. It’s in this week’s New York Business Divorce.
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The Case of the Dueling Dissolution Petitions: Who Can Buy Out Whom?
By Peter A. Mahler on
Dueling corporate dissolution petitions? The petitioner demanding that he be allowed to buy out the respondent? Sounds odd, but that’s what happened in Matter of Carson, decided last week by the Appellate Division, Third Department, and featured in this week’s New York Business Divorce.
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Continue Reading The Case of the Dueling Dissolution Petitions: Who Can Buy Out Whom?
Judges Thinking Outside the LLC Dissolution Box
By Peter A. Mahler on
This week’s New York Business Divorce looks at two recent decisions by Justices Stephen Bucaria and Emily Pines granting “outside the box” remedies in LLC dissolution cases, one involving buyout and the other involving appointment of a temporary receiver to act as monitor of financial records.
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New York and Delaware Courts Decide Disputes Over Accounting Firm Buyouts
By Peter A. Mahler on
This week’s New York Business Divorce features a pair of recent decisions by New York and Delaware courts addressing disputes between accounting firms and departing partners over entitlement to buy-out payments. Both are highly interesting decisions, especially for anyone involved in drafting agreements for professional firms.
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The Rise and Fall and Rise of Blue Chip: Fiduciary Duty Trumps Waiver in Latest First Department Decision
By Peter A. Mahler on
Last week, in Pappas v. Tzolis, the Appellate Division, First Department, handed down a 3-2 decision reinstating claims for fiduciary breach and fraud brought by members of an LLC against another member who acquired their interests allegedly while keeping secret his negotiations to sell the LLC’s sole asset to an outside buyer at a drastically higher valuation. It’s an important decision likely headed to the New York Court of Appeals, and it’s in this week’s New York Business Divorce.
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Continue Reading The Rise and Fall and Rise of Blue Chip: Fiduciary Duty Trumps Waiver in Latest First Department Decision
Beware Taxes on Phantom Income When Entering Into Shareholder Buy-Out Agreement
By Peter A. Mahler on
Tax analysis is a critical part of the business divorce attorney’s job when it comes to fashioning a shareholder buy-out agreement that, among other things, protects the selling shareholder from personal income tax liability on non-distributed or “phantom” net income that later may show up on the shareholder’s Schedule K-1. This week’s New York Business Divorce looks at a recent decision by Manhattan Supreme Court Justice Judith Gische in a fight over the tax consequences of a buy-out settlement of a corporate dissolution.
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Continue Reading Beware Taxes on Phantom Income When Entering Into Shareholder Buy-Out Agreement
Summer Shorts: Stock Sale Under Duress and Other Recent Decisions of Interest
By Peter A. Mahler on
This week’s New York Business Divorce offers some “summer shorts” consisting of summaries of three recent decisions of interest including two by Justice Carolyn E. Demarest and a split decision by the Appellate Division, First Department.
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Case Illustrates How Not to Plan for the Death of a Shareholder in a Professional Corporation
Matter of Bernfeld, decided last week by a Brooklyn appellate panel in a signed opinion authored by Justice John Leventhal, offers a rare and fascinating encounter with an ultimately unsuccessful attempt to obtain judicial dissolution of a professional corporation under Section 1103 of the Business Corporation Law, brought by the widow of the deceased majority shareholder. If you are, or have a client who is, a co-owner of a professional corporation, do yourself a favor and read this week’s New York Business Divorce.
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Continue Reading Case Illustrates How Not to Plan for the Death of a Shareholder in a Professional Corporation