Unlike many states including Delaware, whose statutes authorize oral LLC agreements, New York’s LLC Law mandates a written operating agreement. A recent decision by the Appellate Division, First Department, permitting a claim based on an alleged oral LLC agreement to go forward, prompts examination of the pros and cons of oral LLC agreements, in this week’s New York Business Divorce. …
Continue Reading The Oral LLC Agreement: Boon or Bane?

None too surprisingly, last week the Delaware Supreme Court in Blaustein v. Lord Baltimore Capital Corp. affirmed a Court of Chancery decision dismissing the contention that directors of closely held Delaware corporations have a common-law fiduciary duty to redeem the stock of a minority shareholder. Read more in this week’s New York Business Divorce. …
Continue Reading Delaware Supreme Court: No Duty to Buy Out Minority Stockholder

Kensington Publishing Corp., known for its bodice-ripper romance novels, is the subject of a somewhat drier but — for business divorce practitioners — no less intriguing court decision earlier this month by Justice Eileen Bransten in a control dispute between family members over a voting agreement. Catch it in this week’s New York Business Divorce.
Continue Reading Voting Agreement Triggers Fight for Control of Family-Owned Publishing House

Rules of procedure can be a minefield for any litigation, including judicial dissolution proceedings. This week’s New York Business Divorce features a compilation of 10 of the most common procedural mistakes in business divorce cases. …
Continue Reading 10 Ways to Screw Up Your Business Divorce Case

Delaware law’s contractarian approach is central to that state’s jurisprudence concerning limited liability companies. Last month, in Huatuco v. Satellite Healthcare, the Court of Chancery cited freedom-of-contract in dismissing an action for judicial dissolution based on its finding that the LLC agreement’s provision, limiting member rights to those expressly granted in the agreement, constituted a waiver of the right to seek judicial dissolution. This week’s New York Business Divorce asks the question, does Huatuco take contractarianism too far?
Continue Reading Contractarianism Gone Wild?

Read Part Two of my interview with Professors Claudia Landeo and Kathryn Spier on their article, Shotguns and Deadlocks, in this week’s New York Business Divorce.
Continue Reading Interview With Professors Claudia Landeo and Kathryn Spier on Shotguns and Deadlocks: Part Two

This week’s New York Business Divorce features Part One of a two-part online interview of Claudia Landeo, Associate Professor of Economics at the University of Alberta, and Kathryn Spier, Professor of Law at the Harvard Law School, on their collaborative article forthcoming in the Yale Journal on Regulation entitled “Shotguns and Deadlocks.” The interview explores the article’s thesis, supported by economic theory and data from laboratory experiments, that courts should make greater use of the shotgun buy-out mechanism to resolve deadlock dissolution cases, and should assign the role of offeror to the better-informed owner. …
Continue Reading Interview With Professors Claudia Landeo and Kathryn Spier on Shotguns and Deadlocks: Part One

In Digirolomo v. Sugar LI, LLC, decided last month by Justice Stephen Bucaria, the court devised a novel solution in a lawsuit between LLC members, designed to bring about an equitable buy-out, by conditioning injunctive relief on the plaintiffs filing an amended complaint seeking dissolution. Don’t miss it in this week’s New York Business Divorce. …
Continue Reading Novel Ruling in Lawsuit Over Capital Call Prods Parties to Equitable Buy-Out

In Matter of Banani, decided last month by Justice Stephen Bucaria, the petitioner in a dissenting shareholder appraisal proceeding asked the court to accept as conclusive evidence of the company’s value the price received in a sale of substantially all the company’s assets. Find out if the court granted the request in this week’s New York Business Divorce. …
Continue Reading Arms-Length Sale of Corporation’s Assets Establishes Value in Stock Appraisal Proceeding