This week’s New York Business Divorce features a recent decision in which the court addressed novel issues — and found guidance in Delaware case law — in a shareholder derivative action challenging compensation packages given to officer/directors.
Continue Reading
Derivative Actions
Minority Shareholders’ Derivative Suit Foiled by Voiding of Corporation’s Charter for Nonpayment of Taxes
By Franklin C. McRoberts on
Sometimes the tax collector can prove the bigger impediment to minority shareholder claims than the majority shareholders, as explained in this week’s New York Business Divorce featuring a recent case involving a Delaware corporation whose charter was voided for nonpayment of taxes.…
Continue Reading
Finding No “Therapeutic” Benefit to Corporation, Court Denies Fee Award in Discontinued Shareholder Derivative Action
By Peter Mahler on
Justice Elizabeth Emerson’s recent decision in Sardis v Sardis, denying a fee application under Section 626 (e) of the Business Corporation Law, is essential reading for counsel involved in shareholder derivative actions. Get the story in this week’s New York Business Divorce.…
Continue Reading
“Food Fight” Sequel Ends Badly for Ousted Sibling
This week’s New York Business Divorce revisits a family feud involving a Brooklyn-based food distributor and affiliated realty company, in which an ousted minority owner was on the short end of a series of recent decisions by Justice Sylvia Ash.…
Continue Reading
Suing on Behalf of People You’re Suing Can Sink a Derivative Lawsuit — Especially If You Have a Litigious Nature
By Peter Mahler on
The Manhattan Commercial Division recently dismissed derivative claims by a partner in a family-owned realty partnership based on conflicts of interest and his “litigious nature”. Learn more about this unusual and instructive case in this week’s New York Business Divorce. …
Continue Reading
When Love and Business Fails
By Franklin C. McRoberts on
Posted in Corporate Governance, Derivative Actions
The mix of romance and business partnership can prove toxic when one or the other fails, as illustrated in a case recently decided by Queens County Justice Dufficy in Shih v. Kim, highlighted in this week’s New York Business Divorce. …
Continue Reading
Limited Partners Take a Licking in Two Delaware Supreme Court Decisions
By Peter Mahler on
A pair of important decisions last month by the Delaware Supreme Court handed defeats to limited partners challenging conflicted asset sales by the general partner. Learn more in this week’s New York Business Divorce.…
Continue Reading
Once Opened, The Door to Judicial Dissolution and Buy-Out Is Hard to Close
By Peter Mahler on
The lesson of the case highlighted in this week’s New York Business Divorce is simple: Don’t file for dissolution under the shareholder oppression and looting statute unless you’re prepared for the opposing shareholders to elect to purchase your shares for fair value, because you may not be able to walk it back.…
Continue Reading
The Elusive Surcharge in Dissolution Proceedings
By Peter Mahler on
New York’s statutes authorizing a judicial dissolution petition by oppressed minority shareholders, and granting respondents a corresponding right to elect to purchase the petitioner’s shares, include a provision for a “surcharge” upon controlling shareholders for wrongful dissipation or transfer of corporate assets. It’s a rarely litigated provision, as evidenced by a court decision last month which may be the first ever reported case in which a surcharge claim was upheld. Learn more in this week’s New York Business Divorce. …
Continue Reading
A Decade Later, LLC’s Majority Members Pay The Price For Converting Minority Member’s Interest
By Peter Mahler on
The LLC majority members in Bonanni v. Horizons Investors Corp., were ordered to pay the piper in a post-trial decision earlier this month by Justice Elizabeth Emerson in a 10-year old case, finding that they had converted the plaintiff’s minority membership interest. It’s in this week’s New York Business Divorce. …
Continue Reading