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.
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Derivative Actions
But What of the Equitable Accounting?
By Peter J. Sluka on
In what he described as “the aftermath of what had been an amicable business divorce,” New York County Commercial Division Justice Joel Cohen discusses several interesting and novel limitations on New York’s cause of action for an equitable accounting.
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Singin’ the Derivative Plaintiff Blues
By Peter A. Mahler on
Posted in Derivative Actions
Pleading a derivative claim as direct, a direct claim as derivative, or intermingling direct and derivative claims, will likely invite time consuming and potentially expensive motion practice at the outset of a business divorce case. This week’s New York Business Divorce highlights the pitfalls.
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#MeToo and Business Divorce: The Flip Side
By Franklin C. McRoberts on
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. …
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The Doctrine of Tax Estoppel in Ownership Status Disputes
By Franklin C. McRoberts on
In this week’s New York Business Divorce, read about the history and development of the doctrine of tax estoppel, including two strands of competing case law emanating from a pair of New York State Court of Appeals decisions reaching opposite conclusions about the extent to which one may prove ownership status in a closely-held business based upon estoppel.
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The Money’s There But Out of Reach for the Minority LLC Member
By Peter A. Mahler on
Posted in Derivative Actions, LLCs
A decision last week by the Appellate Division, First Department, highlights the relatively precarious position of LLC minority members versus minority shareholders of close corporations when it comes to seeking remedies for alleged abuse by the LLC’s controlling member. Learn more in this week’s New York Business Divorce.
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Civil RICO: A Blunt But Elusive Tool in Business Divorce Cases
By Peter A. Mahler on
Can the federal statute that brought down John Gotti also play a role in business divorce litigation? This week’s New York Business Divorce looks at the sparse and largely if not entirely unsuccessful role the Racketeer Influenced and Corrupt Organization Act a/k/a RICO has played in litigation between co-owners of closely held firms.
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Fee Sharing in LLC Derivative Suits: A Common Law Right and a One Way Street
By Peter J. Sluka on
In the wild west of LLC derivative lawsuits, the First Department’s recent decision in Bd. of Managers of 28 Cliff St. Condominium v Maguire, 2020 NY Slip Op 06844 [1st Dept Nov. 19, 2020] offers—albeit indirectly—an additional foothold for a successful plaintiff to assert his right to recover his fees from an award in favor of the LLC.
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Business Divorce on the Menu
By Peter A. Mahler on
You’d think amidst the COVID-19 pandemic, with restaurants struggling to stay open, that their owners would have more pressing issues to deal with than litigating against their co-owners, but as you’ll see in this week’s New York Business Divorce, some things never change.
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Two Entities, Two Outcomes: Withdrawal and the Right to an Accounting
By Franklin C. McRoberts on
Posted in Buyout, Derivative Actions
This week’s New York Business Divorce compares two cases of closely-held business owner withdrawal, one involving an LLC, the other a general partnership, one resulting in a right to an accounting, the other not. Why the difference? Read on to find out.
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