Deadlock

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The hydra-headed Ficus Investments litigation is the gift that keeps on giving, at least to students of business divorce. This week’s New York Business Divorce highlights the latest appellate decision in the case, in which the court reversed an order dissolving the limited liability company that managed the mortgage business at the center of the melee.
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Continue Reading Dispute Over Authenticity of Operating Agreement Leads to Reversal of Order Summarily Granting LLC Dissolution

This week’s New York Business Divorce examines a recent Appellate Division, Second Department decision in Matter of Dream Weaver Realty, Inc., where the court affirmed dissolution of a realty company owned equally by two feuding shareholders, over the objection that a liquidation sale of the realty would result in less proceeds than a non-forced, private sale outside of dissolution.
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Continue Reading Impasse Over Winding Up of Realty Company Leads to Judicial Dissolution

Case law involving judicial dissolution of LLCs is still in its infancy. A recent Delaware Chancery Court decision takes another small developmental step, while also highlighting the need for operating agreement buy-sell provisions that stand a reasonable chance of avoiding business divorce litigation. It’s in this week’s New York Business Divorce.
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Continue Reading Two-Member LLC Operating Agreement Contains Recipe for Dissension and Litigation

The defense of “unclean hands” frequently is employed against petitions for involuntary corporate dissolution. A recent decision by Justice Stephen Bucaria, examined in this week’s New York Business Divorce, highlights the special considerations attendant to the defense in 50/50 deadlock dissolution cases, where the focus is less on fault and more on the existence of dissension.
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Continue Reading “Unclean Hands” Defense Can Backfire in Deadlock Dissolution Case

There is nothing “unique” or “even unusual” about deadlock dissolution cases that place them outside the scope of a broad arbitration clause in a shareholders’ agreement, rules Justice Ira Warshawsky in a recent decision featured in this week’s New York Business Divorce.
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Continue Reading No Exception to Arbitration for Deadlock Dissolution Petition, Court Rules