The Appellate Division, Second Department delivered last week a fascinating case pitting a deadlock-based LLC dissolution petition against an equity forfeiture provision in the parties’ operating agreement. Add to that a bracing reminder that lazy pleadings and procedural missteps in special proceedings can be outcome-determinative, and Ribeiro v Libutti, 2025 NY Slip Op 06865 (2d Dept Dec. 10, 2025), becomes a cautionary tale for business owners and litigators alike.
Strict compliance with contractual conditions precedent, yea or nay? In New York, it depends.
Now, the general rule is that strict compliance with contractual conditions precedent is required. The New York Court of Appeals has previously held: “Express conditions must be literally performed, substantial performance will not suffice” (MHR Capital Partners LP v Presstek,
Four sisters. One house. Who owns it?
Today’s case delves into a thorny situation many closely-held family businesses struggle with—proving ownership.
It’s no secret that many closely-held family business do not comply with corporate formalities. In the absence of such formalities, it can be difficult to demonstrate ownership without stock certificates in hand, or other
“Except as otherwise set forth herein” is a common proviso in agreements of all sorts. It can provide clarity. It also can cause dispute, as in the case highlighted in this post.
What must a shareholder show to maintain a derivative action on behalf of a foreign corporation doing business in New York? This week’s post unpacks the Court of Appeals’ emphatic reaffirmation of the internal affairs doctrine.
Section 417 of New York’s LLC Law permits the members to eliminate their fiduciary duties, but only in very narrow circumstances. This week’s post shows how the seemingly toothless provision can carry the day.
Continue Reading The Humble LLC Exculpation Clause Wins Big: Member/CEO Escapes $8M Fiduciary Claims
Did a 25% shareholder forfeit her equity in an entertainment industry management company when she announced her intention to retire? Learn the answer in this week’s New York Business Divorce.
Continue Reading Retirement of Working Owners of Closely Held Business Entities: What’s Your Plan?
This week’s New York Business Divorce presents the 2025 Winter Case Notes, where we highlight a few recent decisions of interest featuring strict adherence to statutory language and the parties’ governing agreements.
Continue Reading Winter Case Notes: Nice Try, But the Agreements Say What They Say
The key question in shareholder oppression claims is often whether the complaining shareholder’s expectations were reasonable under the circumstances. A recent decision from Albany County and a recently published article highlight two sides of a debate about how “contractual” the reasonable expectations inquiry should be.
Continue Reading Can a Shareholder Be Oppressed After Ceding Control? Oppression, Reasonable Expectations, and Contractual Formalism
The shareholder oppression claim under BCL 1104-a has a unique relationship with claims for money damages.
A minority shareholder petitioning for dissolution under BCL 1104-a must establish that the majority shareholders have engaged in “illegal, fraudulent or oppressive actions,” or that the “property or assets of the corporation are being looted, wasted, or diverted for non-corporate purposes by its directors, officers or those in control of the corporation.”
Based on that standard, it’s easy to imagine conduct by the majority that both meets the criteria for dissolution and constitutes a separate tort compensable with money damages (for instance, a claim for the majority’s breach of fiduciary duty). For that reason, it’s very common to see a dissolution petition coupled with money damages claims, all arising out of the same conduct.
But where the money damages claims are filed before the dissolution petition, a plaintiff might be forced to litigate those to completion prior to pursuing their dissolution petition. That’s the tough lesson learned by the petitioner of a dissolution proceeding brought under BCL 1104-a, in Ramirez v Issa, 2024 N.Y. Slip Op. 33488[U] [NY County 2024], the subject of this week’s post.Continue Reading Corporate Dissolution Petition Hits Back Burner in Favor of Earlier Filed Claims for Money Damages