Does the petitioner’s bad faith matter in a deadlock dissolution case when the relationship between the 50/50 owners has broken down irreconcilably? Justice Vito DeStefano recently tackled the question in Feinberg v. Silverberg in an important ruling that is likely to be cited in other cases. Read more in this week’s New York Business Divorce.
Continue Reading Is Bad Faith a Defense in Deadlock Dissolution Proceedings?

A recent decision by Justice Timothy S. Driscoll in Matter of Yahudaii dealt with a dissolution petitioner’s attempt to pursue his case in another county by amending the certificate of incorporation. Did it work? Find out in this week’s New York Business Divorce.
Continue Reading Gaming the Venue Game in Dissolution Cases

A realty corporation seeks to sell its sole asset and buy a replacement property as part of a tax-deferred 1031 exchange. Is the sale in furtherance of the corporation’s business purpose, or is it a liquidation requiring shareholder approval and potentially triggering appraisal rights? That was the issue posed in a recent ruling by Justice Melvin Schweitzer in Theatre District Realty Corp. v. Appleby, feaured in this week’s New York Business Divorce.
Continue Reading With Sir Blackstone’s Help, Court Thwarts Minority Shareholder’s Effort to Block 1031 Exchange

A recent decision by Manhattan Commercial Division Justice Barbara Kapnick addressed the interplay between anti-assignment provisions in a limited partnership agreement and statutory rights of assignment under New York’s Uniform Limited Partnership Act. Get the full story in this week’s New York Business Divorce.
Continue Reading Do Not Pass Go: Court Rejects Assignment of Limited Partner’s Economic Interest

Pastrami, corned beef, and valuation were on the menu in Ruggiero v. Ruggiero, decided last month by Justice Emily Pines in a case pitting the widow of one brother against the surviving brother in a contested buy-out of shares in a kosher deli business. This week’s New York Business Divorce highlights the court’s discussion of the conflicting expert business appraisals.
Continue Reading How Much is That Pastrami in the Window? Court Determines Fair Value of Kosher Deli

Is an LLC membership interest forfeited or reduced when a member fails to make a required capital contribution? That was the threshold issue in a decision last week by the Delaware Chancery Court in Grove v. Brown, where the LLC’s financial success in its first year led to acrimony and litigation. Get the answer in this week’s New York Business Divorce.
Continue Reading LLC’s Quick Success Breeds Mutual Misbehavior in Delaware Case

This week’s New York Business Divorce offers some “summer shorts” consisting of summaries of three recent decisions of interest by Justices Orin Kitzes, Stephen Bucaria and Ellen Coin featuring involving exclusion of a minority LLC member seeking dissolution, a request for injunctive relief pending the trial of a corporate dissolution case, and a cmplaint seeking profit share following the revocation of an LLC membership purchase agreement.
Continue Reading Summer Shorts: The Excluded LLC Member and Other Decisions of Interest

Classifying a shareholder claim as direct or derivative has important consequences at the pleading stage and beyond. This week’s New York Business Divorce looks at a recent decision by Justice Melvin Schweitzer in which he concluded that the defendant majority shareholder’s alleged breaches of fiduciary duty, constituting a “de facto liquidation” of the company, could support dual direct and derivative claims.
Continue Reading Minority Shareholder’s De Facto Liquidation Claim: Direct, Derivative, or Both?

New York’s ancient and outmoded Partnership Law continues to generate litigation almost 100 years after its adoption. A case in point, featured in this week’s New York Business Divorce, is Breidbart v. Wiesenthal, decided earlier this month by the Appellate Division, Second Department, addressing the question whether post-dissolution gain on the sale of realty is included in “profits” under Partnership Law Section 73, applicable when valuing the interest of a deceased or retired partner. …
Continue Reading (I Can’t Get No) Appreciation: Valuing a Deceased Partner’s Interest When the Business Continues

In Shao v. Li, decided last week by Manhattan Commercial Division Justice Charles Ramos, the court analyzed a claim by one LLC member that his co-members entered into a sham collateral assignment of a membership interest designed to circumvent a right of first refusal. You won’t want to miss it in this week’s New York Business Divorce. …
Continue Reading When is Permitted Collateral Assignment of LLC Membership Interest a Prohibited Sale?