Expulsion and Removal

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This week’s New York Business Divorce is a follow-up to last week’s article, a piece about the enormously important appellate decision in the Farro case, the first to carefully consider the correct meaning and interpretation of New York’s LLC merger statute and its relation to the analogous corporation merger statute. In this week’s article, learn about the rest of the story in the Farro litigation, addressed in two companion appellate decisions issued the same day.
Continue Reading The Farro Litigation: The Rest of the Story

The phrase “naked expulsion clause” is not a biblical reference to Adam and Eve’s eviction from the Garden of Eden. It’s about a provision in an LLC agreement at the center of a recent ruling by the Appellate Division, Second Department, in a 10-year litigation saga involving a fractured family-owned business. This week’s New York Business Divorce has the story. …
Continue Reading Court Enforces LLC Agreement’s “Naked” Expulsion Clause

Not all misconduct by majority shareholders is worthy of dissolution or a compelled buy-out. The Court’s broad power under BCL 1104-a to craft appropriate remedies also includes the power to award money damages, and dissolution may not be appropriate where the alleged shareholder oppression was a discrete, one-time transaction.
Continue Reading Court Rejects Oppressed Shareholder’s Bid for Dissolution or Buy-Out, Finds Money Damages Sufficient

This 10th annual edition of Summer Shorts presents brief commentary on four recent decisions of interest in business divorce cases in the New York courts along with a recent decision by the Mississippi Supreme Court upholding an unusual freeze-out remedy.
Continue Reading Summer Shorts: For-Cause Termination of LLC Member and Other Decisions of Interest

Shapiro v Ettenson, known as the case that made it extra dangerous for minority members of New York LLCs without written operating agreements, reappears in this week’s New York Business Divorce on the occasion of a recent decision concerning member expulsion. …
Continue Reading The Curious Case of the Expelled LLC Member Bound by Operating Agreement He Never Signed

This week’s New York Business Divorce examines a highly interesting appellate opinion in a California case centering on whether the operating agreement required unanimous member approval to remove the designated managing member.
Continue Reading Statute Trumps LLC Agreement’s Voting Rights Provision in Dispute Over Manager’s Removal

It’s back! For the third week in a row, New York Business Divorce examines a decision by Manhattan Commercial Division Justice Saliann Scarpulla in a multi-faceted feud among members of the Yu family, this time requiring the court to balance the fiduciary duty owed by LLC managers against the right to amend the operating agreement without the consent of the affected minority member. …
Continue Reading Does This Decision Put the Brakes on Non-Unanimous Amendments to Operating Agreements?

This weeks New York Business Divorce examines a recent decision by Justice Saliann Scarpulla, dismissing a complaint seeking judicial dissolution of two family-owned LLCs in which the plaintiff alleged that his siblings’ actions were in furtherance of a “personal vendetta.”…
Continue Reading Judicial Dissolution and the Weaponized LLC