Liquidation

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It’s been almost 12 years since Bernie Madoff’s Ponzi scheme exploded, inflicting billions in losses on thousands of investors. This week’s New York Business Divorce examines a first-impression ruling by Manhattan Commercial Division Justice Joel M. Cohen in which he upheld a plan of liquidation of a dissolved Madoff feeder fund organized as an LLC. …
Continue Reading Business Judgment Rule Prevails in Fight Over Liquidation Plan for Dissolved Madoff Feeder Fund

In this week’s New York Business Divorce, a wild tale of a settlement achieved, settlement spurned, and a litigant threatened with incarceration for contempt in an intensely bitter, nine-year battle between two brothers over their Manhattan-based real property LLC.…
Continue Reading A Pig in a Poke: The Rollercoaster Kadosh Settlement Litigation

In this week’s New York Business Divorce, find out what happened when the majority shareholder petitioned to rescind the minority shareholder’s unauthorized sale of the corporation’s realty to a third party purchaser in violation of the court’s restraining order. …
Continue Reading Bona Fide Purchaser Avoids Rescission of Minority Shareholder’s Unauthorized Sale of Corporation’s Realty

Minority shareholder oppression on steroids is one way to describe what happened in Matter of Twin Bay Village, Inc., in which an upstate appellate panel recently affirmed an order dissolving the corporation and setting aside a stock issuance that diluted the minority shareholders. Learn more in this week’s New York Business Divorce.…
Continue Reading And the Award For Most Oppressive Conduct By a Majority Shareholder Goes to . . .

New York’s statutes authorizing a judicial dissolution petition by oppressed minority shareholders, and granting respondents a corresponding right to elect to purchase the petitioner’s shares, include a provision for a “surcharge” upon controlling shareholders for wrongful dissipation or transfer of corporate assets. It’s a rarely litigated provision, as evidenced by a court decision last month which may be the first ever reported case in which a surcharge claim was upheld. Learn more in this week’s New York Business Divorce. …
Continue Reading The Elusive Surcharge in Dissolution Proceedings

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”

This week’s New York Business Divorce highlights a fascinating case involving a chain of walk-in airport spas known as XpresSpa, in which Justice Melvin Schweitzer recently ruled that the structuring of a capital investment by a private equity firm triggered a dissolution of XpresSpa’s parent company under the terms of its operating agreement. …
Continue Reading Transfer of LLC’s Assets to Subsidiary Triggers Unintended Dissolution

The decision highlighted in this week’s New York Business Divorce may not be new, but it is one that deserves serious attention as a possible remedial template in deadlock dissolution cases, where one 50% owner with operational control uses it as a sword to force the other 50% owner to accept an under-valued buyout. …
Continue Reading How Should Courts Maximize Shareholder Value When Dissolving Deadlocked Companies?