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This 7th annual edition of Summer Shorts presents brief commentary on three must-read decisions in business divorce cases involving the use of special litigation committees in derivative actions by LLC members; dissolution of a family-owned real estate holding corporation and LLC; and a Delaware case in which Chancery Court ordered dissolution of a deadlocked LLC co-owned by celebrity chef Gordon Ramsay. …
Continue Reading Summer Shorts: Three Must-Read Decisions

Did the Appellate Division, Second Department, throw us a curve ball in its decision last week in Mace v. Tunick, reinstating an LLC dissolution complaint based on its finding that the operating agreement’s purpose clause, authorizing the LLC to engage in “any lawful business,” did not set forth “any particular purpose”? Learn more about this important development in this week’s New York Business Divorce. …
Continue Reading Does Your LLC Agreement Have a Purposeless Purpose Clause?

It’s common practice to convert old realty-holding general partnerships to LLCs for financing and liability purposes. Given that partnerships and LLCs are distinct entity forms governed by distinct statutes, can a pre-conversion partnership agreement nonetheless be enforced among the post-conversion LLC members? Find out in this week’s New York Business Divorce. …
Continue Reading It’s a Partnership! No, It’s an LLC! No, It’s Both!

The Latin maxim, “equity aids the vigilant, not those who slumber on their rights,” steals the show in this week’s New York Business Divorce featuring a recent New Jersey appellate ruling affirming the dismissal of a challenge to the conversion of a limited partnership to an LLC.
Continue Reading In Dispute Over Partnership’s Conversion to LLC, Court Finds No Duty to “Spoon-Feed” Sophisticated Investor

This week’s New York Business Divorce revisits a family feud involving a Brooklyn-based food distributor and affiliated realty company, in which an ousted minority owner was on the short end of a series of recent decisions by Justice Sylvia Ash.
Continue Reading “Food Fight” Sequel Ends Badly for Ousted Sibling

This week’s New York Business Divorce compares two recent New York and Delaware decisions reaching opposite results on the issue of amending LLC agreements without the unanimous consent of the members. You may be surprised to learn which state offers minority members greater protection.
Continue Reading Delaware Ruling Highlights Difference With New York Over Amending LLC Agreements

A recent decision by Manhattan Commercial Division Justice Anil Singh enforced a minor daughter’s assignment of her LLC membership interest to secure her father’s debt repayment to another member, over the objection that the assignment lacked consideration. Learn more in this week’s New York Business Divorce.
Continue Reading Assignment of LLC Interest Defeats Standing Despite Alleged Lack of Consideration

Shotgun buy-sell provisions frequently are included in shareholder and operating agreements, but there’s little evidence that business owners “pull the trigger” with any frequency. This week’s New York Business Divorce looks at one of the rare litigations involving a shotgun provision in action. …
Continue Reading Aim Carefully Before Pulling Trigger on Shotgun Buy-Sell Agreement

This week’s New York Business Divorce examines the “diversity trap” in business divorce cases involving LLCs brought in federal court, highlighting a recent decision by SDNY District Judge Edgardo Ramos dismissing for lack of jurisdiction a suit between former law firm partners.
Continue Reading Beware Diversity Trap in Federal Court Business Divorce Cases Involving LLCs