The baseball season is upon us but there’s no joy in Mudville or, at least, at the Cooperstown All Stars Village baseball camp where the co-owners of a limited liability company are playing hardball litigation. The Third Department umpire recently called a preliminary injunction in favor of the non-controlling team after the controlling member pitched a high-and-inside capital call. Read about it in this week’s New York Business Divorce.
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Operating Agreement
New York Court Follows Delaware Law to Construe Advancement and Indemnification Provisions of Florida LLC’s Operating Agreement
This week’s New York Business Divorce highlights an important decision by the Appellate Division, First Department, construing rights of advancement and indemnification for litigation expenses in a battle royal between majority and minority members of a limited liability company.
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Top 10 Business Divorce Cases of 2008
Have room for one more 2008 top-10 list? This week’s New York Business Divorce highlights the 10 most interesting business divorce cases from last year, with updated case citations and links to previous write-ups.
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Appellate Court Finds Operating Agreement “Silent” on Sale of LLC’s Sole Asset, Upholds Approval by Majority Vote Under Statute’s Default Rule
By Peter A. Mahler on
Last month the Appellate Division, Second Department issued an important decision concerning the application of the LLC Law’s default rules where the operating agreement is silent on a disputed issue. Get up to speed with this week’s New York Business Divorce.
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Continue Reading Appellate Court Finds Operating Agreement “Silent” on Sale of LLC’s Sole Asset, Upholds Approval by Majority Vote Under Statute’s Default Rule
Poorly Drafted Disability Clause in Operating Agreement Provides Novel Defense to LLC Dissolution Proceeding
By Peter A. Mahler on
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.
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Continue Reading Poorly Drafted Disability Clause in Operating Agreement Provides Novel Defense to LLC Dissolution Proceeding
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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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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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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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