Entering its fifth year of litigation featuring two rulings by the Appellate Division in 2017 and last week, the case of Rubin v Baumann is another example of LLCs that suffer from inadequate operating agreements. Learn more in this week’s New York Business Divorce.
Continue Reading Operating Agreement Spawns Multiple Disputes Between 50/50 Members of Realty Holding LLC
What do you get when you combine LLC membership interests determined by variable capital accounts with an off-the-shelf form operating agreement? Litigation, of course! Get the story in this week’s New York Business Divorce.
Continue Reading The Perils of Indeterminate LLC Membership Interests
This week’s New York Business Divorce visits the Bluegrass State for an interesting appellate ruling in an LLC dissolution case concerning the operating agreement’s purpose clause.
Continue Reading Pave Paradise, Put Up a Purposeful Parking Lot
This week’s New York Business Divorce examines a highly interesting appellate opinion in a California case centering on whether the operating agreement required unanimous member approval to remove the designated managing member.
Continue Reading Statute Trumps LLC Agreement’s Voting Rights Provision in Dispute Over Manager’s Removal
This week’s New York Business Divorce tells the cautionary tale of LLC planning gone amiss at the hands of inexperienced counsel, resulting in the LLC’s dissolution following the death of its sole member.
Continue Reading Trouble Down on the Farm: The Importance of Using Experienced Counsel When Forming an LLC
This week’s New York Business Divorce examines a rare court case at the intersection of business divorce and bankruptcy law, in which the court had to decide whether one of several managing members of an LLC had authority on his own to file a bankruptcy petition on the LLC’s behalf.
Continue Reading Who Gets to Play the Bankruptcy Card Under Your LLC Agreement?
Ill-fated hardly begins to describe the legislatively doomed LLC involved in the lawsuit featured in this week’s New York Business Divorce. You won’t want to miss it.
Continue Reading Outlawing of LLC’s Short-Term Rental Business Brings Long-Term Litigation
This week’s New York Business Divorce examines an unusual case centering on an atypical quorum provision in an operating agreement requiring the presence of all managers in order to conduct any business.
Continue Reading Think Twice Before Putting 100% Quorum Requirement in By-Laws or LLC Agreement
This week’s New York Business Divorce examines a noteworthy decision by Manhattan Commercial Division Justice Barry Ostrager in which he held that a member of a member-managed LLC owes fiduciary duties regardless whether the member actively participates in the LLC’s management.
Continue Reading Does an Inactive Member of a Member-Managed LLC Owe Fiduciary Duties?
Over the last several years, the books-and-records proceeding and its corresponding shareholder rights of inspection seem to have entered a bit of renaissance period in the courts. We here at New York Business Divorce have reported on at least nine decisions primarily addressing the topic since September 2014, going on record to proclaim the phenomenon as a “boost” for the summary proceeding, by which minority owners in closely-held businesses can get a window into the management and operation of the companies from which they’ve been shut out. We’ve even gone so far as to suggest that books-and-records proceedings may be “on a roll” of late, both in terms of an expansion what constitutes a “proper purpose” for bringing the proceeding, as well as in terms of the scope of information attainable.
That trend, at least with respect to the frequency with which issues related to inspection rights are being litigated, appears to be continuing into 2018. What follows are summaries of three of this year’s more notable decisions addressing inspection rights – all from Manhattan Supreme Court, as it happens.
But first, a quick refresher on the subject matter at hand…
Continue Reading Inspection Rights, Oral Operating Agreements, and Other Pop-Diva Delights