What happens when a law firm breakup combines self-help with firm funds, weaponized billing practices, a fatal deemed admission, and a federal court’s refusal to entertain dissolution? Ballon Stoll gives us the answer—and several cautionary lessons.
In this week’s New York Business Divorce, we encounter an unusual combination of adverse litigants: father and son versus mother and son duking it out in not one, not two, but three lawsuits simultaneously.
Continue Reading Multigenerational Intrafamily Business Dispute Defeated for Lack of Standing
A recent Second Department decision reminds business divorce litigants that while K-1s may be powerful evidence of an economic interest, they cannot substitute for compliance with a partnership agreement’s formal admission requirements.
Continue Reading Tax Partner, Not True Partner: The Limits of K-1s in Business Divorce Litigation
Don’t snicker at that promissory estoppel claim buried in your opponent’s complaint. Every once in a while, a cause of action for promissory estoppel can salvage an otherwise nonviable claim for equity ownership in the form of a fallback damages remedy. Have a read in this week’s New York Business Divorce.
Continue Reading A Wrong in Search of a Remedy: Promissory Estoppel
Litigation over who is—and who is not—a member of a limited liability company has become a defining feature of LLCs. A recent First Department decision suggests a shift away from informality and back toward strict compliance with the contractual mechanics of admission.
Continue Reading Promise of Equity Falls to Operating Agreement’s Rigid Admission Requirements
Hoping to derive standing to sue from an LLC membership interest assignment? This week’s New York Business Divorce is another reminder that assignment of a membership interest does not convey actual membership status, with all the coveted legal rights flowing therefrom, unless the operating agreement grants the assignor such power, and, then, only where the assignor and assignee comply with all the conditions of the contract for admission of a new member. Anything less can result in total litigation defeat.
Continue Reading Mere Assignment of an LLC Membership Interest Does Not Make You a Member
A recent appellate ruling provides the perfect excuse for revisiting a favorite topic, namely the powers of an estate representative of a deceased LLC member.
Continue Reading Score Another Round for the Estate: First Department Upholds Right of Deceased LLC Member’s Executor to Pursue Member Rights
“Except as otherwise set forth herein” is a common proviso in agreements of all sorts. It can provide clarity. It also can cause dispute, as in the case highlighted in this post.
Imagine litigating a case for nearly eight years to an eight figure money judgment, only to lose on appeal for lack of standing. It happened in our final New York Business Divorce story of 2024.
Continue Reading Check Your Footing: $36 Million Money Judgment Eviscerated in Brutal Appellate Standing Loss
This week’s New York Business Divorce post concerns the impact that estoppel can play in determining the all-important question of, “Am I a member of the LLC?”
Continue Reading To be or Not to Be (a Member). That is the Question… That Estoppel Can Help Answer.