This week’s post covers a case likely to make waves inside and outside of Delaware, where Vice Chancellor Laster explores the interplay between acts that are void ab initio and equitable defenses, and he encourages an appeal so that Delaware may reconsider its laws on the issue.
Continue Reading Magic Words Still Matter, and Equitable Defenses Can’t Save a “Void” Transfer
In this week’s New York Business Divorce, read about the matrimonial-turned-business-divorce litigation between Italian billionaire Silvio Scaglia and his estranged wife / business partner, Julia Haart, and the difficult conflicts-of-laws questions that can arise when litigating damages claims related to Delaware entities in New York courts.
Continue Reading Conflicts of Laws and the Internal Affairs Doctrine
In this week’s New York Business Divorce, read about the opaque doctrine of disqualifying shareholder derivative plaintiff conflicts of interest, including a pair of decisions less than a month apart by New York and Delaware courts casting doubt upon the doctrine’s continued expanse and viability.
Continue Reading The “Conflict of Interest” Defense to Shareholder Derivative Standing
In this week’s New York Business Divorce, read about a brand new decision considering the correct interpretation of a rarely-litigated statute: Section 1006 of the Limited Liability Company Law authorizing partnership to LLC conversions. The decision provides transactional lawyers useful guidance to structure such a reorganization to potentially avoid a limited partner’s right to dissent from the transaction and seek fair value in an appraisal proceeding.
Continue Reading A Fresh Take on Partnership to LLC Conversions
A plaintiff’s “equitable standing” to bring a shareholder derivative action is hardly a common issue in litigation of the sort, which makes all the more interesting last week’s decision by the Delaware Court of Chancery rejecting a plaintiff’s attempt to bypass the contemporaneous ownership rule. Read more in this week’s New York Business Divorce.
Continue Reading Equitable Standing in Shareholder Derivative Suit Bows to the Contemporaneous Ownership Rule
In this week’s New York Business Divorce, read about a recent appeals court decision in which an elderly male business founder alleged he was ousted from the company and his reputation smeared based upon false allegations of sexual harassment allegedly solicited by a hostile male CEO. Do these allegations equate to a viable claim for breach of fiduciary duty against the CEO? Find out in this week’s New York Business Divorce.
Continue Reading #MeToo and Business Divorce: The Flip Side
The Delaware Chancery Court finally caught up with court decisions in New York and elsewhere, ruling last month in a case involving a bitcoin mining company that Delaware courts lack subject matter jurisdiction to adjudicate petitions to dissolve non-Delaware business entities. Learn more in this week’s New York Business Divorce.
Continue Reading Delaware Declines Subject Matter Jurisdiction Over Judicial Dissolution of Foreign Entities
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
If man’s first sin was eating the apple, a business valuator’s greatest sin is mixing apples and oranges. In Dieckman v. Regency GP, LP, Chancellor Bouchard denied the Plaintiff’s bid for $1.6 billion in damages, even after finding that the defendant general partner breached the partnership agreement’s implied duty of good faith and fair dealing. The decision rests on Chancellor Bouchard’s complete rejection of Plaintiff’s damages calculation on the grounds that it was akin to “comparing apples to oranges.”
Continue Reading General Partner Breached Implied Covenants in Partnership Agreement, but Plaintiff’s “Apples-to-Oranges” Calculation Dooms Bid for Damages
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