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.
Continue Reading The Hidden Cost of a Devalued Buyback Upon Termination for Cause
A recent First Department ruling in Sansum v. Fioratti is one of the few reported instances in which the defense of unclean hands was successfully asserted to defeat on the merits a minority shareholder’s claim for corporate dissolution. Read this week’s New York Business Divorce to find out more.
Continue Reading Wash Hands Before Suing
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.
Continue Reading Summer Shorts: Director Removal and Other Recent Decisions of Interest
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.
Continue Reading Court in Law Firm Dissolution Suit Must Decide, Was Partnership a “Sham”?
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.
Continue Reading The Conflict Continues Over Judicial Dissolution of Foreign Corporations
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?
Continue Reading Contractarianism Gone Wild?
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.
Continue Reading Is Bad Faith a Defense in Deadlock Dissolution Proceedings?
This week’s New York Business Divorce offers some “summer shorts” consisting of summaries of three recent decisions of interest by Justices Orin Kitzes, Stephen Bucaria and Ellen Coin featuring involving exclusion of a minority LLC member seeking dissolution, a request for injunctive relief pending the trial of a corporate dissolution case, and a cmplaint seeking profit share following the revocation of an LLC membership purchase agreement.
Continue Reading Summer Shorts: The Excluded LLC Member and Other Decisions of Interest
“Is she or isn’t she a shareholder? Only her tax preparer knows for sure.” It may not be quite as catchy as the famous Clairol commercial, but it’s a good entreaty to read this week’s New York Business Divorce highlighting a recent appellate ruling in a dissolution case in which the petitioner unsuccessfully relied on tax returns to prove his shareholder status.
Continue Reading Form K-1s Do Not Always a Shareholder Make
This week’s New York Business Divorce features brief summaries of a handful of noteworthy court decisions that escaped my attention last year, including a pair of decisions involving deadlock and oppressed minority shareholder disputes, and another pair of decisions involving receivership applications.
Continue Reading Some Winter Case Notes