It’s been almost 12 years since Bernie Madoff’s Ponzi scheme exploded, inflicting billions in losses on thousands of investors. This week’s New York Business Divorce examines a first-impression ruling by Manhattan Commercial Division Justice Joel M. Cohen in which he upheld a plan of liquidation of a dissolved Madoff feeder fund organized as an LLC. …
Continue Reading Business Judgment Rule Prevails in Fight Over Liquidation Plan for Dissolved Madoff Feeder Fund

This week’s New York Business Divorce, authored by Peter J. Sluka, looks at a first-impression decision by the Delaware Chancery Court in which the court characterized a shareholder buy-out provision as a call option, with consequences for the company’s attempt to revoke its initiation of the buy-out. …
Continue Reading Consider Whether Your Buy-Sell Provision is a Call Option Before Pulling the Trigger

The months-long shutdown of New York courts due to the COVID-19 pandemic did not stop the judges of the Manhattan Commercial Division from issuing a number of noteworthy decisions in business divorce cases. This week’s New York Business Divorce highlights three of them. …
Continue Reading A Trio of Recent Business Divorce Decisions by Manhattan Commercial Division Judges

Man marries and has a daughter. He executes an operating agreement providing for his wife and daughter to take his LLC interest upon death. But the man has an alleged mistress, who allegedly begets a daughter out of wedlock. The man then executes a will providing for his alleged mistress and out-of-wedlock daughter to take his LLC interest upon death, contrary to the operating agreement. What could go wrong? You can read about this steamy litigation in this week’s New York Business Divorce.
Continue Reading How to Resolve Competing Estate Plans of an LLC Owner with a Double Life

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. …
Continue Reading This Single-Appraiser Buy-Sell Agreement Was Asking for Trouble

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.
Continue Reading $30 Million Appraisal of Plumbing Fixtures “Marketeer” Goes Down the Drain at Fair Value Hearing

This week’s New York Business Divorce features my podcast interview of Donald J. Weidner, Dean Emeritus of Florida State University College of Law, about his forthcoming article in The Business Lawyer entitled LLC Default Rules Are Hazardous to Member Liquidity.
Continue Reading Member Liquidity, Default Rules, and the Corporate-ization of LLCs: A Conversation with Dean Donald J. Weidner

In this week’s New York Business Divorce, we consider a remarkably thoughtful opinion by Commercial Division Justice Jennifer G. Schecter containing some noteworthy hints about the future of LLC dissolution claims in light of the coronavirus pandemic and its catastrophic economic impact on New York closely-held businesses.
Continue Reading Will the Pandemic Be a Boon for Future LLC Dissolution Claimants?

Is there such a thing as a contractually-infused, common-law fiduciary duty that can override an LLC manager’s “sole and absolute discretion”? Decide for yourself when you read this week’s New York Business Divorce.
Continue Reading When an LLC Manager’s “Sole and Absolute Discretion” is Neither Sole Nor Absolute

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.
Continue Reading Buy-Sell Agreements Are Supposed to Deter Litigation, Not Foment It