Does an LLC’s member’s pulling the trigger on a shotgun buy-sell agreement foreclose a petition for deadlock-based dissolution? Not if the members can’t agree on the terms of the sale, holds Vice Chancellor Slights.
Continue Reading Holes in Shotgun Buy-Sell Agreement Keep Deadlock Dissolution Petition Alive
This week’s New York Business Divorce offers its annual Winter Case Notes with synopses of four noteworthy decisions by courts in New York and Iowa.
Continue Reading Winter Case Notes: Dissolution of Not-For-Profit Corporation and Other Decisions of Interest
The interaction between an LLC’s operating agreement and a subsequent, informal deal between the members raises difficult questions surrounding the enforceability of either agreement. In a recently-filed Manhattan Commercial Division case, the Court granted the plaintiff a preliminary injunction, signaling to the parties that the plaintiff was likely to succeed on his claim to enforce the informal deal notwithstanding arguably contrary provisions in the operating agreement. The case reminds us that the formality requirements of an LLC operating agreement may give way to an informal agreement when both LLC members manifest their intent to be bound by the informal agreement.
Continue Reading A Shotgun Buy-Sell Agreement and an Email Deal Walk into a Beachside Bar . . .
Serving as the tiebreaker on a equally divided board of directors can be a thankless task, which puts it mildly when one faction sues to remove the tiebreaker. This week’s New York Business Divorce highlights a noteworthy case in which a 50% member of a Delaware LLC claimed the right to unilaterally remove the designated tiebreaker.
Continue Reading It Takes Two to Remove a Tiebreaker
Can a shotgun turn into a minefield? The answer is “yes” judging from a recent decision by Manhattan Commercial Division Justice Andrew Borrok finding a defective exercise of provisions in an LLC agreement for a deadlock-triggered shotgun buy-out. Read about it in this week’s New York Business Divorce.
Continue Reading LLC Member Pays the Price For Not Sticking to Deadlock-Breaking Script
In this week’s New York Business Divorce, we consider a remarkably thoughtful opinion by Commercial Division Justice Jennifer G. Schecter containing some noteworthy hints about the future of LLC dissolution claims in light of the coronavirus pandemic and its catastrophic economic impact on New York closely-held businesses.
Continue Reading Will the Pandemic Be a Boon for Future LLC Dissolution Claimants?
Even a comedy club is not exempt from the grip of a acrimonious business divorce, as you’ll learn in this week’s New York Business Divorce.
Continue Reading No Laughing Matter: Deadlock Dissolution Petition Targets Legendary NYC Comedy Club
Under what circumstances, if at all, does resignation of one member of a two-member board of directors eliminate “deadlock” and “internal dissention” as an available grounds for corporate judicial dissolution? In this week’s New York Business Divorce, we consider a recent ruling by Justice Andrea Masley on that important question.
Continue Reading Resignation: Antidote for Internal Dissention and Deadlock?
Last week’s decision by Chancellor Bouchard in Acela v. DiFalco involves a flawed deadlock resolution provision in an LLC agreement that not only failed to resolve deadlock, it was exploited by one side to create deadlock. Learn more in this week’s New York Business Divorce.
Continue Reading Can a Deadlock Resolution Provision Cause Deadlock? This One Did
This week’s New York Business Divorce highlights and links to a Business Divorce Roundtable podcast interview with arbitrator/mediator Erica Garay on the novel topic of arbitrating deadlock between 50/50 owners of closely held business entities.
Continue Reading Arbitrating Deadlock: A Conversation with Arbitrator Erica Garay