One of the more interesting defenses in judicial dissolution cases alleging deadlock is that the petitioner itself contrived or manufactured the deadlock for the purpose of achieving dissolution. It’s a defense long ago recognized in cases involving close corporations, and only more recently in cases involving LLCs, including a decision this month by the Delaware Chancery Court. Learn more in this week’s New York Business Divorce.
Continue Reading Contrived LLC Deadlock Doesn’t Cut the Delaware Dissolution Mustard

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 . . .

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?

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?