An unusual set of facts, involving the termination of a shareholder’s employment following his criminal conviction, set the stage for last week’s appellate ruling requiring the redemption of his shares notwithstanding the company’s noncompliance with certain time limitations governing the exercise of its purchase option. Get the full story in this week’s New York Business Divorce.
Continue Reading Stockholder Fired, Forced to Sell Shares After Felony Conviction
Compulsory Buyout
Waterfalls and Compulsory Buybacks: New York Courts Decide Disputes Involving Sophisticated Delaware LLC Agreements
By Peter A. Mahler on
In this week’s New York Business Divorce you’ll read about two recent cases in which New York courts decided disputes between members of Delaware LLCs over the interpretation of provisions — one dealing with a distribution waterfall and the other with compulsory buyback of membership interests — found in highly sophisticated operating agreements. …
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Novel Ruling in Lawsuit Over Capital Call Prods Parties to Equitable Buy-Out
By Peter A. Mahler on
In Digirolomo v. Sugar LI, LLC, decided last month by Justice Stephen Bucaria, the court devised a novel solution in a lawsuit between LLC members, designed to bring about an equitable buy-out, by conditioning injunctive relief on the plaintiffs filing an amended complaint seeking dissolution. Don’t miss it in this week’s New York Business Divorce. …
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Successful Common-Law Dissolution Case Survives Appeal, But Remedy Limited to Buy-Out
By Peter A. Mahler on
Common-law dissolution makes another rare appearance in a recent appellate ruling by the First Department in Gjuraj v. Uplift Elevator, which may be the only reported common-law dissolution case in which a plaintiff won at trial. Don’t miss it in this week’s New York Business Divorce. …
Continue Reading Successful Common-Law Dissolution Case Survives Appeal, But Remedy Limited to Buy-Out
How Should Courts Maximize Shareholder Value When Dissolving Deadlocked Companies?
By Peter A. Mahler on
The decision highlighted in this week’s New York Business Divorce may not be new, but it is one that deserves serious attention as a possible remedial template in deadlock dissolution cases, where one 50% owner with operational control uses it as a sword to force the other 50% owner to accept an under-valued buyout. …
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Who Wants to Be a Minority Shareholder of a Delaware Closely-Held Corporation?
By Peter A. Mahler on
For a variety of reasons, many closely-held corporations in New York and elsewhere choose to incorporate in Delaware. A Delaware Chancery Court decision last week, in Blaustein v. Lord Baltimore Capital Corp., serves as a good reminder of the perils of Delaware incorporation to minority shareholders. Learn more in this week’s New York Business Divorce.
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Appellate Court Orders Equitable Buy-Out in LLC Dissolution Case
By Peter A. Mahler on
A decision last week by the Appellate Division, Second Department, in Mizrahi v. Cohen ordered a buy-out of a 50% LLC member by the other 50% member as an equitable remedy in lieu of a winding-up and liquidation of the LLC’s assets. Read about this important decision in this week’s New York Business Divorce.
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“But I Did Nothing Wrong!” No Defense to Involuntary Dissociation of LLC Member
By Peter A. Mahler on
A recent New Jersey appellate ruling upheld the expulsion of an LLC member whose conduct, even if not wrongful, almost caused the collapse of the business involving an overseas medical school. Read more in this week’s New York Business Divorce.
Continue Reading “But I Did Nothing Wrong!” No Defense to Involuntary Dissociation of LLC Member
Court Decision Boosts Equitable Buy-Out Remedy in LLC Dissolution Case
By Peter A. Mahler on
A decision last month by Justice Carolyn Demarest in Mizrahi v. Cohen adds to the short but growing list of LLC dissolution cases in which courts have ordered equitable buy-outs notwithstanding the absence of enabling provision in the LLC agreement. This week’s New York Business Divorce has this important story.
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Arbitration Award in Stock Buy-Out Dispute Withstands Challenge
By Peter A. Mahler on
This week’s New York Business Divorce examines a recent decision by Justice Carolyn E. Demarest in Pisane v. Feig, where the court confirmed an arbitration award stemming from a petition for judicial dissolution of several affiliated companies, in which the arbitrator decided which of the two parties was entitled to buy out the other, and at what price.
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Continue Reading Arbitration Award in Stock Buy-Out Dispute Withstands Challenge