This week in New York Business Divorce, read about what appears to be the first New York appeals court decision to enforce a waiver-of-dissolution provision in an LLC operating agreement, a departure from prevailing appellate case law holding broad anti-dissolution provisions void as against public policy.
Continue Reading New Year, New Law – New Opacity – for LLC Owner Disputes
The irony of litigation over buy-sell agreements is that such agreements are specifically intended to avoid litigation when owners die or become disabled or otherwise seek to exit the firm. Take, for example, last week’s Appellate Division ruling, reversing the lower court’s decision dismissing a claim to enforce an operating agreement’s buy-sell provision. Better yet, read about it in this week’s New York Business Divorce.
Continue Reading The Little Buy-Sell That Could
This week’s New York Business Divorce post examines a recent appellate court decision in which the Third Department searches the record to find deadlocked 50/50 members unable to carry on a realty LLC’s business, warranting dissolution.
Continue Reading Help Comes From an Unexpected Place in LLC Deadlock Dissolution: The Third Department
This week’s New York Business Divorce focuses on the legal hurdles litigants and their counsel must overcome to discover an opponent or non-party’s confidential tax records and information.
The key question in shareholder oppression claims is often whether the complaining shareholder’s expectations were reasonable under the circumstances. A recent decision from Albany County and a recently published article highlight two sides of a debate about how “contractual” the reasonable expectations inquiry should be.
Continue Reading Can a Shareholder Be Oppressed After Ceding Control? Oppression, Reasonable Expectations, and Contractual Formalism
This week’s New York Business Divorce proudly presents its 17th annual survey of the past year’s Top 10 business divorce cases featured on this blog.
Continue Reading Top 10 Business Divorce Cases of 2024
Imagine litigating a case for nearly eight years to an eight figure money judgment, only to lose on appeal for lack of standing. It happened in our final New York Business Divorce story of 2024.
Continue Reading Check Your Footing: $36 Million Money Judgment Eviscerated in Brutal Appellate Standing Loss
We frequently see a partner’s “fiduciary duties” expressed as the union of the duty of loyalty and the duty of care. The duty of loyalty requires fiduciaries to avoid elevating the interests of any other person or entity (including their own) above the interests entrusted to their care. The duty of care requires fiduciaries to exercise their authority with reasonable diligence and prudence.
Though stated with disarming simplicity, business divorce litigation has a way of exploiting the often-blurry edges of those duties. Consider the “quiet quitting” phenomenon, where an employee does their job, but gives no more effort or enthusiasm than is absolutely necessary. If a partner or LLC manager did the same thing, how long before it rises to a breach of fiduciary duty?
That’s one of several difficult questions that New York County Commercial Division Justice Margaret Chan was called to answer in Metcalf v Safirstein Metcalf, LLP, 2024 NY Slip Op 34380 (NY County 2024), an early-stage summary judgment decision amid (another!) law firm breakup that highlights just how messy—and fact dependent—breach of fiduciary duty claims asserted between business owners can get. Continue Reading When Less Effort Leads to More Trouble: Quiet Quitting and Fiduciary Accountability
This week’s New York Business Divorce post concerns the impact that estoppel can play in determining the all-important question of, “Am I a member of the LLC?”
Continue Reading To be or Not to Be (a Member). That is the Question… That Estoppel Can Help Answer.
To what extent do sharply disputed issues of fact preclude injunctive relief in business divorce cases? Read about an illuminating decision from Albany County Commercial Division Justice Richard Platkin addressing this question in this week’s New York Business Divorce.
Continue Reading Fact Issues and Credibility Determinations on Injunction Motions