In this week’s New York Business Divorce, we consider a first-in-a-generation appeals court decision affirming a lower court’s removal of a corporate officer “for cause.”
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Judicially Expelled Member Pays Heavy Price For Abandoning LLC
This week’s New York Business Divorce highlights a fascinating New Jersey case in which the court expelled the minority member of an LLC after it abandoned the venture and withdrew its financial support.
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Bad Things Can Happen When You Steal a Business from a Minority Co-Owner
In this week’s New York Business Divorce, read about a rare punitive damages award in a business divorce case after a majority owner misappropriated a 25% interest in a sushi restaurant, secretly transferred the entity’s assets to another he owned, then dissolved the original, all unbeknownst to the minority owner.
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At-Will Employment Agreement Plus Mandatory Redemption Clause Leaves Minority Shareholder-Employees Out in the Cold
What happens when you cross an at-will employment agreement with a mandatory redemption requirement at a deeply discounted price? Find out in this week’s post.
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The Art of Manager Removal
Combine a business divorce with a marital divorce and what do you get? Find out in this week’s New York Business Divorce.
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LLC Forced Buy-Out Pits Fair Value Against Fair Market Value Against Power to Amend Operating Agreement
If you want to find out what can happen when an LLC agreement authorizes member removal for any or no reason but doesn’t address compensation for the terminated member’s interest, read this week’s New York Business Divorce.
Continue Reading LLC Forced Buy-Out Pits Fair Value Against Fair Market Value Against Power to Amend Operating Agreement
Never the Twain Shall Meet: Damages Claims Do Not Offset the Purchase Price in Buy-Sell Agreements
This week’s post considers a recent decision from New York County Commercial Division Justice Borrok, who offers well-reasoned guidance on the separateness between claims to specifically enforce a buy-sell agreement, on the one hand, and damages claims, on the other.
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A Two-Act Play of LLC Default Rules and Manager Removal
The interplay between the default rules of the LLC law and the members’ agreement sometimes gets complicated. In a duo of recent decisions from Justice Cohen, that interplay took center-stage when a majority of members invoked the default rules in an attempt to oust the managing member from authority.
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Too Little, Too Late: Court Sides with Ousted Member, but Denies Preliminary Injunction Undoing Termination
Preliminary injunctions are a powerful tool in the business divorce litigator’s toolbox, and they often involve a race to the courthouse. This week’s post offers a reminder that sometimes, that race is critical; courts will be more inclined to preserve the status quo with a preliminary injunction than to undo action with one.
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Stay Away Settlement Between Closely-Held Corporation and Dissident Shareholder Goes Away Upon Shareholder’s Death
A corporation and a dissident shareholder enter into agreement where the dissident shareholder agrees to receive regular payments in exchange for staying away from the Company’s business. What happens when the outspoken shareholder dies? In Stile v C-Air Customhouse Brokers-Forwards, Inc., Index No. 656575/2020 [Sup Ct, New York County 2021], the New York County Supreme Court declined to dismiss a suit by the estate of a shareholder subject to a stay away settlement agreement on the grounds that the stay away obligations did not expressly apply to the shareholder’s successors.
Continue Reading Stay Away Settlement Between Closely-Held Corporation and Dissident Shareholder Goes Away Upon Shareholder’s Death