Foreign Business Entities

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A longstanding inter-departmental rift was healed last week when the Appellate Division, First Department, issued a decision disavowing one of its own precedents and aligning itself with Second and Third Department decisions holding that New York courts lack jurisdiction to order dissolution of foreign business entities. Read about this important ruling in this week’s New York Business Divorce. …
Continue Reading A Split No More: First Department Agrees, No Subject Matter Jurisdiction to Dissolve Foreign Business Entities

This week’s New York Business Divorce highlights two recently published articles on two topics of great interest to business divorce practitioners: (1) whether courts of one state have jurisdiction to dissolve business entities formed in another state, and (2) the role of equity in Delaware LLC litigation. …
Continue Reading Recent Articles Highlight Dissolution of Foreign Entities and Delaware LLC Litigation

shortsTraditions are good. This blog has two annual traditions. First, at the end of each year I write a post listing the year’s top ten business divorce decisions. Second, each August I offer readers who are (or ought to be) on summer vacation some light reading in the form of three, relatively short case summaries.

So here we are in what’s been a particularly felicitous August weather-wise (at least here in the Northeast U.S.), with another edition of Summer Shorts. This edition’s summaries feature two out-of-state cases — one from Florida involving expulsion of an LLC member and one from Delaware involving the valuation upon redemption of an LLC member’s interest — and a New York appellate court decision involving the removal of a limited partnership’s general partner.

The Anti-Chiu: Florida Court Upholds LLC Member’s Expulsion

Froonjian v Ultimate Combatant, LLC, No. 4D14-662 [Fla. Dist. Ct. App. May 27, 2015].  The Florida intermediate appellate court’s ruling in Froonjian makes for a fascinating contrast with New York case law represented most prominently by the Second Department’s 2010 decision in Chiu v Chiu holding that, absent express authorization in the LLC’s operating agreement, a member’s involuntary expulsion is not permitted. Going 180° in the other direction, the Froonjian court upheld the majority members’ expulsion of a minority member from a Florida LLC that had no operating agreement, reasoning that the Florida default statute vesting all decision-making authority in the members acting by majority vote encompasses the authority to expel a member.
Continue Reading Summer Shorts: Member Expulsion and Other Recent Decisions of Interest

A recent decision by Manhattan Commercial Division Justice Jeffrey Oing dismissed for lack of subject matter jurisdiction a petition to dissolve a Delaware LLC whose operating agreement included a venue provision waiving the members’ right to sue anywhere but New York. Get the full story in this week’s New York Business Divorce.
Continue Reading Delaware LLC Agreement Says Members Waive Right to Sue Outside New York, But New York Judge Says Otherwise in Dissolution Case

In the face of Second Department case law rejecting subject-matter jurisdiction over statutory dissolution claims involving foreign business entities, the plaintiffs in Bonavita v Savenergy, Inc. argued to Justice Timothy Driscoll that he nonetheless could hear a claim for common-law dissolution of a Delaware corporation. Did they succeed? Find out in this week’s New York Business Divorce. …
Continue Reading Court Declines Jurisdiction Over Claim for Common-Law Dissolution of Delaware Corporation