Can a shareholder use the implied covenant of good faith and fair dealing inherent in the corporation’s shareholders agreement to plead what otherwise would be derivative claims as direct ones? Find out in this week’s post.
Continue Reading Derivative into Direct and Waived into Preserved: The Transformative Power of the Implied Covenant of Good Faith and Fair Dealing

This week’s New York Business Divorce revisits the Eastland Food v Mekhaya case, focusing on last month’s Maryland Supreme Court’s split decision on whether the minority shareholder has a direct claim for breach of fiduciary duty based on alleged disguised distributions taken by the controlling shareholders.
Continue Reading Eastland Redux: Do Close Corporation Shareholders Have a Direct Claim Against Directors For Taking Disguised Distributions?

New York law regards a shareholder derivative plaintiff’s standing as fundamentally distinct from the plaintiff’s individual capacity. That leads to problems where a shareholder derivative defendant hopes to counterclaim against the plaintiff for personal liabilities. Read about this problem, and whether it forecloses direct counterclaims against shareholder derivative plaintiffs, in this week’s New York Business Divorce.
Continue Reading Can a Shareholder Suing Derivatively Face Countersuit Individually?

In this week’s New York Business Divorce we take a deep dive into the law of res judicata and collateral estoppel, tackling a recurring issue in business divorce litigation: re-litigation following standing-based dismissals.
Continue Reading Legal Déjà Vu: The Law of Preclusion and Re-Litigation of Standing-Based Dismissals

In this week’s New York Business Divorce, read about the Appellate Division – First Department’s important decision last Friday clarifying how courts must apply the internal affairs doctrine to the question of standing to sue in derivative cases involving non-New York incorporated entities.
Continue Reading Derivative Standing and the Internal Affairs Doctrine

In this week’s New York Business Divorce, read about a multi-year litigation odyssey culminating in the statute-of-limitations dismissal of a claim for misappropriation of an alleged corporate opportunity to own land based upon the date of execution of the contract of sale rather than the closing of the real estate purchase.
Continue Reading A Litigation Odyssey

A claim for “usurpation of corporate opportunity” is simple to allege, but difficult to prove. Two recent cases out of the Manhattan Commercial Division and the U.S. District Court for the Southern District of New York explore the bounds of the corporate opportunity doctrine under New York and Delaware law.
Continue Reading A Recurring Business Divorce Feature: Usurpation of Corporate Opportunity

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