Former timeshare owners of the iconic Gurney’s Inn in Montauk, New York, who dissented from a cash-out merger suffered a reversal of fortune when, earlier this month, the Appellate Division, First Department, reversed the trial court’s determination of the fair value of their shares, finding that their appraiser’s evaluation of the resort property was “highly inflated.” Get the full story in this week’s New York Business Divorce.
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Valuation
Court Enforces LLC Agreement’s “Naked” Expulsion Clause

The phrase “naked expulsion clause” is not a biblical reference to Adam and Eve’s eviction from the Garden of Eden. It’s about a provision in an LLC agreement at the center of a recent ruling by the Appellate Division, Second Department, in a 10-year litigation saga involving a fractured family-owned business. This week’s New York Business Divorce has the story. …
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Business Divorce Nation: A Cross-Country Tour of Recent Decisions of Interest
It’s time for another cross-country trip in this week’s New York Business Divorce which summarizes a quintet of recent appellate decisions in business divorce cases by courts outside New York. …
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This Single-Appraiser Buy-Sell Agreement Was Asking for Trouble

This week’s New York Business Divorce highlights a recent decision by Justice Joel M. Cohen in a fascinating, high stakes case involving an allegedly “rigged” appraisal pursuant to a repurchase option in an LLC agreement. …
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$30 Million Appraisal of Plumbing Fixtures “Marketeer” Goes Down the Drain at Fair Value Hearing

Was the company worth $30 million or $6 million? That was the question recently decided by Justice Vito M. DeStefano who presided over a 7-day fair-value appraisal hearing in Magarik v. Kraus USA, Inc. This week’s New York Business Divorce has the story.
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Buy-Sell Agreements Are Supposed to Deter Litigation, Not Foment It

This week’s New York Business Divorce highlights a noteworthy case in which, following the death of a 50% shareholder, dysfunctional buy-sell agreements led to multi-front shareholder litigation in state and federal courts.
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No Double Dipping! Court Denies Post-Valuation Date Distributions in Equitable Buyout of LLC Member

George Costanza would be unhappy to hear about an Appellate Division decision last week affirming a trial court ruling, among others of interest in an LLC appraisal proceeding, in which it rejected as “double dipping” a request for post-valuation date income distributions on top of the fair value award. Learn more in this week’s New York Business Divorce.
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Post-Valuation Date Distributions: Should They Be Credited Against Fair Value Awards?

Should the fair value award in a judicial dissolution proceeding, following the respondent’s election to purchase and an appraisal proceeding, be reduced by post-valuation date shareholder distributions? Find out in this week’s New York Business Divorce.
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Half-Baked LLC Agreement Yields Improvised Valuation Decision

A rudimentary, “de facto” operating agreement with a cryptic withdrawal/buyout provision predictably set the stage for a unique valuation contest in the Delaware case highlighted in this week’s New York Business Divorce.
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Disclosure of Estate Tax Stock Appraisals in Shareholder Disputes

Are stock appraisals done for estate tax purposes discoverable in stock valuation proceedings or other types of shareholder disputes involving the shares of a deceased stockholder or of someone who inherits shares from the estate? A recent appellate decision on the topic is the springboard for this week’s post.
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