This week’s New York Business Divorce highlights an unusual corporate dissolution case in which a tie-break provision in the shareholders agreement of 50/50 shareholders gave one of them the decisive vote in the event of board deadlock, which in turn doomed the other’s deadlock dissolution petition.
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A very interesting decision earlier this month by Justice Eileen Bransten in Doppelt v. Smith addressed whether a minority limited partner’s right to seek judicial dissolution was preempted by the partnership agreement’s provision authorizing dissolution upon the consent of a majority of the limited partnership interests. Read more in this week’s New York Business Divorce.
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Agreements providing for compulsory buyouts upon termination of a minority shareholder’s employment can be a good thing. Complications or sometimes litigation sets in, however, when termination for cause is linked to a devalued buyout formula, as illustrated in the case highlighted in this week’s New York Business Divorce.
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This week’s New York Business Divorce offers short summaries of three recent decisions of interest by Commercial Division Justices Melvin Schweitzer, Carolyn Demarest, and Marcy Friedman in which the courts addressed interesting issues concerning shareholder standing to seek removal of a director and dissolution of a wholly-owned subsidiary; venue in dissolution proceedings; and application of CPLR 205’s savings provision to the statute of limitations in a dissolution case.
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A Manhattan appellate panel recently ordered a trial in a suit between the estate of a deceased law firm partner and the surviving partner over whether the latter’s post-death admission of a new partner was part of an alleged “sham” transaction designed to defeat the estate’s entitlement to receive half the firm’s assets upon dissolution and liquidation. You won’t want to miss it in this week’s New York Business Divorce.
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Justice Emily Pines’ decision last month in Matter of Bianchi, dismissing for lack of subject matter jurisdiction a petition to dissolve a New York-based Delaware corporation, raises anew the conflicting decisions on the issue among New York’s several Appellate Divisions. This week’s New York Business Divorce has the story.
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Delaware law’s contractarian approach is central to that state’s jurisprudence concerning limited liability companies. Last month, in Huatuco v. Satellite Healthcare, the Court of Chancery cited freedom-of-contract in dismissing an action for judicial dissolution based on its finding that the LLC agreement’s provision, limiting member rights to those expressly granted in the agreement, constituted a waiver of the right to seek judicial dissolution. This week’s New York Business Divorce asks the question, does Huatuco take contractarianism too far?
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Does the petitioner’s bad faith matter in a deadlock dissolution case when the relationship between the 50/50 owners has broken down irreconcilably? Justice Vito DeStefano recently tackled the question in Feinberg v. Silverberg in an important ruling that is likely to be cited in other cases. Read more in this week’s New York Business Divorce.
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