A recent decision from one of our favorites, Albany County Commercial Division Justice Richard M. Platkin, is a reminder to would-be assignees of limited partnership interests that without total compliance with the terms and conditions of the partnership agreement, an attempted assignment conveys only economic rights (i.e., the right to distributions, profits, and losses), but not voting or management rights, even if both sides to the assignment genuinely intended transfer of all ownership rights.

Although not an LLC case, the concept of Marini v Marini Realty LP (2025 NY Slip Op 51138[U] [Sup Ct, Albany County July 2, 2025]), applies equally to LLC members: to become a full-blown equity holder with all attendant rights and privileges, compliance with the governing contract (or if none, the default rules under the Partnership Law and Limited Liability Company Law) is essential. Standard language in such contracts requires unanimity for admission of new equity owners. After all, who wants to take on a new partner without one’s consent? Less than total compliance conveys only economic benefits, not voting or management rights.Continue Reading Hoping to Take Assignment of an LP or LLC Interest? Best Read the Contract

Internal Affairs

What must a shareholder show to maintain a derivative action on behalf of a foreign corporation doing business in New York?  This week’s post unpacks the Court of Appeals’ emphatic reaffirmation of the internal affairs doctrine.…

Continue Reading Court of Appeals Again Bolsters Internal Affairs Doctrine, This Time Clipping Derivative Suits Brought on Behalf of Foreign Corporations

LLCL 417

Section 417 of New York’s LLC Law permits the members to eliminate their fiduciary duties, but only in very narrow circumstances.  This week’s post shows how the seemingly toothless provision can carry the day. …

Continue Reading The Humble LLC Exculpation Clause Wins Big: Member/CEO Escapes $8M Fiduciary Claims

A court order directing a party to file a verified formal accounting is not to be taken lightly, and certainly not to be contradicted by the accounting party, as the unfortunate defendant found out in a post-trial decision issued earlier this month by Commercial Division Justice Jennifer Schecter.…

Continue Reading The Consequences of Deception: Defendant Hit With $4.5 Million Judgment After 12-Year “Wild Goose Chase Based on a Lie”

Pre-answer motions to dismiss for untimeliness are exceptionally common in business divorce litigation. Statute of limitations analysis can be deceptively simple in theory, but elusively difficult in practice, even for veteran judges. Identifying the applicable statute of limitations is just one of three steps a court must perform as part of its decision making process:

  • What’s the applicable statute of limitations?
  • What’s the accrual date of the claim?
  • Are there any applicable tolls or equitable exceptions?

A recent decision from the Albany-based Appellate Division – Third Department, Lambos v Karabinis (___ AD3d ___, 2025 NY Slip Op 03367 [3d Dept June 5, 2025]), is a reminder to business divorce litigants – on either side of the v. – not to overlook that crucial third step in the statute of limitations analysis, which can rescue complaints from pre-answer dismissal even if they allege misconduct from decades earlier.Continue Reading A Tardy Plaintiff’s Best Friend: The Open Repudiation Doctrine

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Two recent cases, one from the Second Department and one from Suffolk County Justice Garguilo, shed light on some of the more nuanced issues in shareholder oppression litigation: the “equitable” prejudgment interest rate to be applied to a buyout under BCL 1118, and the relationship between a claim for dissolution and one for money damages.…

Continue Reading Beyond Fair Value: When Shareholder Oppression Demands Interest and Damages

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Did a 25% shareholder forfeit her equity in an entertainment industry management company when she announced her intention to retire? Learn the answer in this week’s New York Business Divorce.…

Continue Reading Retirement of Working Owners of Closely Held Business Entities: What’s Your Plan?