If you think you’ve seen it all when it comes to corporate dissolution contests, think again as you read this week’s New York Business Divorce which looks at a case in which one LLC member opposed the other’s dissolution petition based on the latter’s alleged mental disability.
Continue Reading Poorly Drafted Disability Clause in Operating Agreement Provides Novel Defense to LLC Dissolution Proceeding
Operating Agreement
Delaware Court Applies Statute of Frauds to LLC Operating Agreement
By Peter A. Mahler on
The Delaware Court of Chancery last week issued a ruling of first impression applying the statute of frauds to invalidate an alleged oral LLC operating agreement. Will the ruling have any impact on New York LLCs? Find out in this week’s New York Business Divorce.
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Continue Reading Delaware Court Applies Statute of Frauds to LLC Operating Agreement
WWDD (What Would Delaware Do) With an In Terrorem LLC Dissolution Waiver Clause?
By Peter A. Mahler on
Two courts, one in Delaware and the other in New York, are asked to enforce operating agreements waiving the right to seek judicial dissolution of an LLC. Only one of them says “yes.” Can you guess which one? Get the answer in this week’s New York Business Divorce.
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Continue Reading WWDD (What Would Delaware Do) With an In Terrorem LLC Dissolution Waiver Clause?
De Facto Dissolution of LLC Does Not Terminate Members’ Fiduciary Duty or Avoid Accounting for Subsequent Profits
By Peter A. Mahler on
The Appellate Division, Third Department, has ruled that an LLC member’s fiduciary duties continue even after the de facto break-up of the company. Read about this important decision in this week’s New York Business Divorce.
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Continue Reading De Facto Dissolution of LLC Does Not Terminate Members’ Fiduciary Duty or Avoid Accounting for Subsequent Profits
Indemnity Provision Can Tilt the Playing Field in Litigation Between Business Partners
This week’s New York Business Divorce looks at a recent case in which the managing member of an LLC, relying on the operating agreement’s indemnity provision, sought to sell company assets for various purposes including payment of her own legal fees to defend against an action brought by the other members to remove her as manager.
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Continue Reading Indemnity Provision Can Tilt the Playing Field in Litigation Between Business Partners
Caplash Redux: 50% Member Cannot Hire Lawyer to Represent LLC in Dispute with Other 50% Member
By Peter A. Mahler on
When 50-50 business partners have a falling out, the ensuing battle for the high ground can lead one of them to take hostile action in the company’s name without the other’s consent. A new decision on the subject by Justice Kenneth Fisher launches this week’s New York Business Divorce.
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Continue Reading Caplash Redux: 50% Member Cannot Hire Lawyer to Represent LLC in Dispute with Other 50% Member
LLC Member’s Marital Woes Lead to Loss of Membership Interest
By Peter A. Mahler on
This week’s New York Business Divorce examines an intriguing case involving an LLC whose operating agreement required a member to transfer his interest to the other members because of his filing of a divorce action against his wife. When the divorcing member refused to do so, he bought himself a second divorce litigation, of the business kind.
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Continue Reading LLC Member’s Marital Woes Lead to Loss of Membership Interest