Standing

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Ex-convict Chip Watkins likely thought he’d paid his debt to society when he completed his jail sentence. As it turned out, however, Watkins short-changed society by failing to disclose to the authorities his claimed $600,000 investment in a closely held real estate company. In this week’s New York Business Divorce, find out how Watkin’s omission dashed his hopes of recovery in a shareholder derivative action recently dismissed by Justice Emily Pines.
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Continue Reading Judicial Estoppel Doctrine Defeats Ex-Convict’s Standing to Bring Shareholder Derivative Action Based on Failure to Disclose Alleged Stock Interest to Probation Authorities at Time of Sentencing

The grant or denial of preliminary injunctive relief at the outset of a dissolution proceeding can make a critical difference in the events that follow. This week’s New York Business Divorce looks at two back-to-back decisions by Justice Orin Kitzes, one denying and one granting injunctive preliminary relief, in cases that otherwise have a lot in common.
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Continue Reading A Tale of Two Preliminary Injunction Applications in Corporate Dissolution Cases Decided Three Days Apart, Same Issue, Same Judge, Different Outcomes

The hiring by one 50% business owner of legal counsel to take action in the company’s name against the other 50% owner is a frequent source of litigation. This week’s New York Business Divorce revisits the Caplash case, which involved this issue in the LLC context, on the occasion of a new decision by the Appellate Division, Fourth Department, affirming rulings by Justice Kenneth Fisher.
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Continue Reading Appellate Court Affirms Caplash Ruling Rejecting Authority of 50% LLC Member to Hire Company Counsel in Proceedings Against Other 50% Member

This week’s New York Business Divorce features a recent decision by Justice Bernard Fried granting dissolution of an LLC owned 50-50 by two members locked in several highly contentious lawsuits. The decision addresses standing of a membership interest assignee to seek dissolution, and whether deadlock can establish ground for dissolution of a passive investment holding company.
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Continue Reading Court Grants 50% LLC Member’s Petition for Judicial Dissolution of Passive Holding Company

This week’s New York Business Divorce features a recent decision by the Appellate Division, Second Department, reversing the denial of a preliminary injunction centering on the enforceability of a written Nominee Agreement which acknowledged Party A as the “true owner” of a 50% stock interest in the corporation and appointed as his nominee Party B who otherwise was reflected as 100% owner in all of the corporation’s records and tax filings.
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Continue Reading Nominee Agreement Trumps Corporation Records in Fight Over Stock Ownership

In the last of a three-part series on disputes over stock ownership in corporate dissolution cases, this week’s New York Business Divorce examines a case decided by New York County Justice Lewis Bart Stone involving a fight between three family members, each of whom took a different position over the ownership of the company shares.
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Continue Reading Undocumented Stock Interests Invite Challenges to Standing in Corporate Dissolution Cases: Part Three

In the second of a three-part series on challenges to stock ownership in corporate dissolution cases, this week’s New York Business Divorce looks at a recent post-trial ruling by Kings County Supreme Court Justice Jack Battaglia pitting one shareholder claiming 100% ownership versus two others claiming that the three were equal one-third owners.
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Continue Reading Undocumented Stock Interests Invite Challenges to Standing in Corporate Dissolution Cases: Part Two

This week’s New York Business Divorce presents the first in a three-part series discussing one of the thorniest problems in corporate dissolution contests involving challenges to standing based on the petitioner’s lack of a stock certificate, shareholders’ agreement or other direct evidence of shareholder status. This week’s post highlights a recent decision on the subject by Suffolk County Commercial Division Justice Emily Pines.
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Continue Reading Undocumented Stock Interests Invite Challenges to Standing in Corporate Dissolution Cases: Part One

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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Continue Reading Top 10 Business Divorce Cases of 2008

Does a minority member of an LLC have a right to intervene in an action against the LLC by a creditor? How about if the creditor’s claim arises from collusion or other impropriety by the controlling member? This week’s New York Business Divorce provides answers courtesy of a recent appellate court ruling in the curious case of Baron v. Rocketboom LLC.
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Continue Reading Court Bars Minority Member From Intervening in Creditor’s Suit Against LLC