In this week’s New York Business Divorce, read about the plight of a Brooklyn beer brewing company founder whose co-members allegedly attempted to “freeze out” his interest by way of a forced dilution and ouster from management, and his efforts to fight back with a start-of-the-case preliminary injunction motion.
Continue Reading Court Enjoins Dilution of Brewing Company LLC Membership Interest
Expulsion and Removal
Stop the Vote: Injunction Halts Shareholders Meeting Pursuant to Courts’ Broad Power to Review Corporate Elections
In a decision of apparent first impression last month, Justice Nancy Bannon of the Manhattan Supreme Court issued an injunction against the holding of a corporate election under BCL § 619. Minority shareholders facing an anticipated election called by a rival majority would be wise to consider the roadmap to injunctive relief charted by the plaintiffs here. …
Continue Reading Stop the Vote: Injunction Halts Shareholders Meeting Pursuant to Courts’ Broad Power to Review Corporate Elections
Be Careful What You Say. It May Get You Expelled From Your LLC.
There are few issues involving LLCs more likely to generate litigation than the expulsion of a member, especially when the expelled member is denied any payout for its interest, as occurred in the case highlighted in this week’s New York Business Divorce.
Continue Reading Be Careful What You Say. It May Get You Expelled From Your LLC.
The Farro Litigation: The Rest of the Story
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
Court Enforces LLC Agreement’s “Naked” Expulsion Clause
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
Court Rejects Oppressed Shareholder’s Bid for Dissolution or Buy-Out, Finds Money Damages Sufficient
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
Summer Shorts: For-Cause Termination of LLC Member and Other Decisions of Interest
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
The Curious Case of the Expelled LLC Member Bound by Operating Agreement He Never Signed
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
The Perils of Indeterminate LLC Membership Interests
What do you get when you combine LLC membership interests determined by variable capital accounts with an off-the-shelf form operating agreement? Litigation, of course! Get the story in this week’s New York Business Divorce.
Continue Reading The Perils of Indeterminate LLC Membership Interests
Business Divorce in the Surrogate’s Court
In this week’s New York Business Divorce, we consider an interesting question raised by the occasional overlap of two niche areas of law practice: the jurisdictional power of New York’s probate courts to resolve business divorce disputes.
Continue Reading Business Divorce in the Surrogate’s Court