LLCs

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Earlier this month, in a case called Reichman v. Reichman, the Brooklyn-based Appellate Division, Second Department, reversed a lower court’s decision and granted a preliminary injunction in a bitter feud between father and son over the ownership of a dot-com business organized as an LLC. Don’t miss it in this week’s New York Business Divorce.
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Continue Reading Father May Not Know Best: Appeals Court Grants Injunction in Son’s Bid to Establish Majority Ownership of LLC

This week’s New York Business Divorce features a pair of recent decisions by New York and Delaware courts addressing disputes between accounting firms and departing partners over entitlement to buy-out payments. Both are highly interesting decisions, especially for anyone involved in drafting agreements for professional firms.
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Continue Reading New York and Delaware Courts Decide Disputes Over Accounting Firm Buyouts

Last week, in Pappas v. Tzolis, the Appellate Division, First Department, handed down a 3-2 decision reinstating claims for fiduciary breach and fraud brought by members of an LLC against another member who acquired their interests allegedly while keeping secret his negotiations to sell the LLC’s sole asset to an outside buyer at a drastically higher valuation. It’s an important decision likely headed to the New York Court of Appeals, and it’s in this week’s New York Business Divorce.
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Continue Reading The Rise and Fall and Rise of Blue Chip: Fiduciary Duty Trumps Waiver in Latest First Department Decision

A recent and controversial decision by the Delaware Chancery Court highlights the need for counsel drafting multiple-member LLC operating agreements to focus attention on whether, and if so the circumstances under which, a member may transfer its membership interest, including economic and voting rights, to another existing member with or without the other members’ consent. Learn more about this important case law development in this week’s New York Business Divorce.
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Continue Reading Avoiding the Pain of Achaian, or How Not to Draft LLC Membership Transfer Provisions

Why is New York near the bottom of the pack in the U.S. when it comes to the popularity of the limited liability company as the choice of entity for new businesses? A new statistical study concludes that New York’s formation fees, and particularly its expensive requirement for newspaper publication of LLC formations, is the reason. Read more in this week’s New York Business Divorce.
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Continue Reading 625 Reasons Why New York Lags in LLC Formations

It’s one thing to claim that someone never became a member of an LLC, it’s another to claim that an admitted LLC member later withdrew. Justice Stephen Bucaria addresses the latter claim in his recent decision in Gitlin v. Chirinkin, featured in this week’s New York Business Divorce.
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Continue Reading Member of Real Estate LLC Never Withdrew, Held Entitled to Share of Sale Proceeds

Last week’s rulings by New York’s high court in the closely-watched Centro and Arfa cases resolves much of the uncertainty that has surrounded the ability of controlling owners of closely held companies to bargain for effective releases against fiduciary-based claims of non-disclosure when buying out minority owners. Get the full story in this week’s New York Business Divorce.
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Continue Reading New York’s Top Court Resets the Bargaining Table When Controlling Owner of Closely Held Company Buys Out Minority Partner

Two notable decisions handed down the same day last week by the Appellate Division, First Department, address claims against managers of Delaware LLCs for breach of fiduciary duty. The plaintiffs scored in one and struck out in the other. It’s in this week’s New York Business Divorce.
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Continue Reading One Hit, One Miss: NY Courts Decide Fiduciary Duties of Delaware LLC Managers