The double whammy of a marital divorce of spouses who also co-own a closely held business — or are deemed to co-own the business in community property states — can be avoided throtugh creative and careful business and legal planning, says Dallas attorney Ladd Hirsch in an engaging interview for the Business Divorce Roundtable podcast, highlighted in this week’s New York Business Divorce.
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Too Clever By Half? Court Permits Suit Challenging Share Increase Tied to Transfer Restrictions
Stock transfer restrictions in closely held corporations are routinely upheld by courts. So are increases in authorized shares that treat existing shareholders uniformly. But sometimes, as in the case highlighted in this week’s New York Business Divorce, the combined effect of the two may breach duties owed by controllers to the minority.
Continue Reading Too Clever By Half? Court Permits Suit Challenging Share Increase Tied to Transfer Restrictions
Conflict in the Family-Owned Business: Interview With Professor Benjamin Means
Business divorce on steroids. That’s how I describe the tenor of litigation that can erupt when members of a family-owned business have a falling out.
No one has devoted more scholarship to the challenging intersection of law and conflict in the family-owned business than Benjamin Means, Associate Professor of Law at the University of South Carolina School of Law.
Longtime readers of this blog may recall a two-part online interview of Ben that I posted a few years ago (read here and here), in which he answered a series of questions about his groundbreaking law review article entitled Non-Market Values in the Family Business. The article uses social science and expansive notions of contractual relations in advocating for courts to give greater weight to what he calls “family values” in adjudicating corporate dissolution and other disputes among shareholder-members of the same family.
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Executor of Deceased Majority Member Appointed Receiver to Wind Up LLC
The death and testamentary bequests of the majority member of a family-owned LLC set the stage for a legal contest over the executor’s standing to enforce dissolution and have himself appointed as receiver to wind up the LLC’s affairs. This week’s New York Business Divorce has the story.
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One Parking Lot, Two Brothers, Three Decisions
The Appellate Division, Second Department, last week decided three appeals in the same business divorce case, addressing important issues concerning claims for LLC dissolution, equitable buyout, and use of company monies for legal fees defending dissolution proceedings. This week’s New York Business Divorce has the story.
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Death of a Shareholder
This week’s New York Business Divorce highlights a recent decision by Justice Richard Platkin in a case involving a fractured family-owned business where the deaths of two shareholders before and during litigation triggered a consequential change in control.
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Court Applies 25% Marketability Discount Despite “Strong Indicators of Liquidity”
For the second week in a row, New York Business Divorce examines the always controversial discount for lack of marketability in fair value contests, this time focusing on a recent New Jersey appellate decision applying a 25% DLOM despite strong evidence of liquidity.
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A Doozy of a Discontinuance in Deadlock Dissolution Case
The death of a shareholder amidst a deadlock dissolution proceeding turns the case upside down, as explained in a decision last month by Justice Vito M. DeStefano granting the petitioner’s request to discontinue the proceeding. Check it out in this week’s New York Business Divorce.
Continue Reading A Doozy of a Discontinuance in Deadlock Dissolution Case
Court Dissolves LLC Due to Managing Member’s “Self-Dealing and Dishonest Conduct”
Another family-owned business on the rocks takes the spotlight in this week’s New York Business Divorce featuring a recent decision by Justice Christine Sproat granting an LLC dissolution petition.
Continue Reading Court Dissolves LLC Due to Managing Member’s “Self-Dealing and Dishonest Conduct”
LLC Agreement’s All-Purpose Purpose Clause Defeats Dissolution Petition
This week’s New York Business Divorce closes out the year with an interesting decision by Justice Timothy Driscoll dismissing a dissolution petition that followed the sale of an LLC’s sole real estate asset based on the broad purpose clause in the parties’ LLC agreement..
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