Derivative Actions

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On the heels of the Zelouf and AriZona Iced Tea cases, this week’s New York Business Divorce highlights yet another interesting fair value contest, decided by Justice Carolyn Demarest, involving a battle of forensic accounting and valuation experts over the alleged skimming of millions in cash receipts at a restaurant. …
Continue Reading Restaurant’s Cash-Skimming Majority Owners Forced to Buy Out Minority Shareholder or Face Dissolution

Last week’s post highlighted Justice Kornreich’s rejection of a marketability discount in the Zelouf case, a dissenting shareholder appraisal proceeding. In this week’s Part Two, New York Business Divorce examines a number of additional issues of interest in the Zelouf decision, including tax-affecting, control premium, and damages for quasi-derivative claims. …
Continue Reading Zelouf (Part Two): Fair Value Ruling Addresses Range of Issues

In this week’s New York Business Divorce, find out how Justice Vito DeStefano ruled when asked to dismiss a damages suit by a minority shareholder against the majority shareholder, brought years after the minority shareholder abandoned a prior dissolution proceeding in which the majority shareholder elected to purchase.
Continue Reading Buy-Out Interruptus: Court Okays New Suit Five Years After Unconsummated Election to Purchase in Prior Dissolution Case

A must-read decision last week by Justice Elizabeth Emerson in Federico v Brancato highlights the unique attributes and challenges of resolving conflicts within family-owned businesses. You won’t want to miss it in this week’s New York Business Divorce.
Continue Reading When Parents Have to Choose: Succession Planning and the Family-Owned Business

This week’s New York Business Divorce features an important decision last month by Justice Vito DeStefano in which he upheld a claim for advancement of legal fees incurred by a close corporation minority shareholder, director and former officer, who initiated suit against the controlling shareholder, in defending counterclaims asserted in the name and right of the company. …
Continue Reading Court Upholds Former Officer’s Right to Seek Indemnity and Advancement in Intra-Company Dispute

A noteworthy decision last week by Justice Carolyn Demarest is featured in this week’s New York Business Divorce. The case, involving a fight between sibling co-owners of a food distributor and a separate realty company, addresses important issues concerning the scope of a general release and LLC members’ right to advancement of legal defense costs. …
Continue Reading Court Limits Scope of Release, Denies Advancement of Defense Costs in Sibling “Food Fight”

Kensington Publishing Corp., known for its bodice-ripper romance novels, is the subject of a somewhat drier but — for business divorce practitioners — no less intriguing court decision earlier this month by Justice Eileen Bransten in a control dispute between family members over a voting agreement. Catch it in this week’s New York Business Divorce.
Continue Reading Voting Agreement Triggers Fight for Control of Family-Owned Publishing House

Derivative claims are frequently asserted in business divorce litigation. Within the last two months the Manhattan-based Appellate Division, First Department, issued three decisions addressing the demand futility requirement in derivative lawsuits involving Delaware and New York corporations, limited partnerships and LLCs. Get up to speed with this week’s New York Business Divorce.
Continue Reading Recent Appellate Rulings Address Demand Futility in Derivative Lawsuits