It’s the third anniversary of New York Business Divorce, and what better way to celebrate the occasion, and the New Year, than a look back at 2010’s top-ten business divorce cases.
Continue Reading Top 10 Business Divorce Cases of 2010
Stock Transfer Restrictions
Decision Breaks New Ground in Dispute Over Enforcement of Stock Buyback Triggered by Filing of Dissolution Petition
A highly instructive decision by Westchester Commercial Division Justice Alan D. Scheinkman in Matter of Piekos (Home Studios Inc.) grabs the spotlight in this week’s New York Business Divorce. The question presented: Does the mere filing of a dissolution petition by an allegedly oppressed minority shareholder trigger a mandatory buyback of the petitioner’s shares at book value under the terms of the shareholders’ agreement?
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Continue Reading Decision Breaks New Ground in Dispute Over Enforcement of Stock Buyback Triggered by Filing of Dissolution Petition
Appellate Court Rejects Mandatory Stock Buyback Triggered by Dissolution Petition
This week’s New York Business Divorce revisits an important topic, involving mandatory stock buybacks triggered by the filing of a dissolution petition, prompted by a recent decision by an upstate appellate court in Matter of Stevens (Allied Builders, Inc.).
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Continue Reading Appellate Court Rejects Mandatory Stock Buyback Triggered by Dissolution Petition
Court Invalidates Control-Shifting Stock Transfer Made in Violation of Corporation’s Right of First Refusal
The right of first refusal, commonly used to restrict stock transfers in closely held corporations, continues to live up to its reputation as one of the most reliable generators of employment for litigation attorneys in Giaimo v. EGA Associates Inc., in which the Appellate Division, First Department, recently reversed a lower court’s ruling denying summary judgment in a battle for corporate control between brother and sister. It’s in this week’s New York Business Divorce.
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Continue Reading Court Invalidates Control-Shifting Stock Transfer Made in Violation of Corporation’s Right of First Refusal
Beware Unreasonable Restraints on Alienation When Drafting Shareholder and Operating Agreements
Shareholder and operating agreements typically contain provisions restricting the right to transfer stock or membership interests. A recent decision by Justice Ira Warshawsky in Verderber v. Commander Enterprises Centereach, LLC, in which he refused to grant a preliminary injunction enforcing a transfer restriction, prompts this week’s New York Business Divorce to examine the ancient rule against unreasonable restraints on alienation.
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Continue Reading Beware Unreasonable Restraints on Alienation When Drafting Shareholder and Operating Agreements
Fired Minority Shareholder’s Oppression Claim Not Barred by At-Will Employment Provisions in Shareholders’ Agreement
When majority shareholders, for good or bad reason, terminate the minority shareholder’s employment in a closely held company that pays no dividends, is the minority shareholder’s at-will employment status a defense to an involuntary corporate dissolution proceeding? The answer arrives in this week’s New York Business Divorce courtesy of a recent decision by Justice Marily Shafer in the case of Ambar v. Devington Technologies, Ltd.
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Continue Reading Fired Minority Shareholder’s Oppression Claim Not Barred by At-Will Employment Provisions in Shareholders’ Agreement
Appellate Court Enforces Stock Buyback Triggered by Dissolution Petition
Danger lurks for the dissolution petitioner and attorney who beforehand don’t thoroughly analyze whether the mere filing of a petition may trigger rights of first refusal in the shareholders’ agreement. This week’s New York Business Divorce highlights a recent appellate decision where the unwary petitioner fell into the self-made trap.
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Continue Reading Appellate Court Enforces Stock Buyback Triggered by Dissolution Petition