Last month the Appellate Division, Second Department issued an important decision concerning the application of the LLC Law’s default rules where the operating agreement is silent on a disputed issue. Get up to speed with this week’s New York Business Divorce.
Continue Reading Appellate Court Finds Operating Agreement “Silent” on Sale of LLC’s Sole Asset, Upholds Approval by Majority Vote Under Statute’s Default Rule
Corporate Governance
Controlling Shareholder’s Dilution of Minority Interest Requires Bona Fide Business Purpose
By Peter A. Mahler on
Posted in Corporate Governance, Stock Dilution
This week’s New York Business Divorce looks at a recent decision by Justice Herman Cahn addressing the fiduciary duties of a controlling shareholder who authorizes and issues additional shares to himself without offering the same opportunity to minority shareholders.
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Continue Reading Controlling Shareholder’s Dilution of Minority Interest Requires Bona Fide Business Purpose
Delaware and New York Courts Agree that 50% LLC Member May Not Hire Lawyer to Represent Company Adverse to Other 50% Member
By Peter A. Mahler on
There’s been a spate of recent court decisions concerning the authority of one 50% business owner to hire counsel to represent the company adverse to the other 50% owner. This week’s New York Business Divorce looks at two new decisions, one from New York and one from Delaware.
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Continue Reading Delaware and New York Courts Agree that 50% LLC Member May Not Hire Lawyer to Represent Company Adverse to Other 50% Member
Indemnity Provision Can Tilt the Playing Field in Litigation Between Business Partners
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.
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Continue Reading Indemnity Provision Can Tilt the Playing Field in Litigation Between Business Partners
Caplash Redux: 50% Member Cannot Hire Lawyer to Represent LLC in Dispute with Other 50% Member
By Peter A. Mahler on
When 50-50 business partners have a falling out, the ensuing battle for the high ground can lead one of them to take hostile action in the company’s name without the other’s consent. A new decision on the subject by Justice Kenneth Fisher launches this week’s New York Business Divorce.
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Continue Reading Caplash Redux: 50% Member Cannot Hire Lawyer to Represent LLC in Dispute with Other 50% Member
Statute and Cases Create Uncertainty Over LLC Member’s Right to Inspect Books and Records
By Peter A. Mahler on
The LLC Law gives members certain rights to inspect company records. Read this week’s New York Business Divorce to find out how courts have taken different approaches to the issue.
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Continue Reading Statute and Cases Create Uncertainty Over LLC Member’s Right to Inspect Books and Records
50% Shareholder May Not Sue Other 50% Shareholder in Company’s Name
By Peter A. Mahler on
Does one 50% shareholder’s greater capital contributions give him the authority to sue the other 50% shareholder in the company’s name? Get the answer in this week’s New York Business Divorce.
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Continue Reading 50% Shareholder May Not Sue Other 50% Shareholder in Company’s Name
Court Upholds Authority of 50% Shareholder/President to Sign Lease Without Co-Owner’s Approval
By Peter A. Mahler on
Posted in Corporate Governance, Family-Owned Businesses
A fascinating opinion by Justice Kenneth Fisher is the focus of this week’s posting about a classic corporate governance dispute between 50/50 shareholders who also happen to be brothers, when one of them signs a company lease over the other’s objection.
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Continue Reading Court Upholds Authority of 50% Shareholder/President to Sign Lease Without Co-Owner’s Approval