A decision last month by Albany Justice Richard Platkin in Matter of Ryan (Integra Networks, Inc.) opted in favor of the petitioners’ request to voluntarily discontinue their corporate dissolution proceeding over the respondents’ request for leave to make an untimely buy-out election. Find out why in this week’s New York Business Divorce. …
Continue Reading Court Chooses Voluntary Dismissal Over Buy-Out in Two-Year Dissolution Case

What happens when feuding business partners bring competing lawsuits against each other, including a dissolution proceeding, in different courts in different states? That’s the question addressed in a recent decision by Suffolk County Commercial Division Justice Elizabeth Emerson in Picarella v. HMA Properties, LLC, highlighted in this week’s New York Business Divorce. …
Continue Reading Fighting for Home Court Advantage in Multi-State Business Divorce Litigation

If you’re going to require super-majority consent as to certain business decisions in a shareholder or operating agreement, be sure to draft clearly so as to leave no room for potential litigation over the level of required consent. That’s the lesson of Herbert v Schodack Exit Ten, LLC, decided earlier this month by an upstate appellate panel and highlighted in this week’s New York Business Divorce.
Continue Reading Unanimous Vote Requirement in LLC Agreement Turns on Meaning of “Commitment”

The implied covenant of good faith and fair dealing is a much misunderstood and frequently misused legal doctrine in disputes between co-owners of business entities. A decision by the Delaware Supreme Court earlier this month provides an excellent roadmap to understand the doctrine and the ability–or not–to contract around it. It’s in this week’s New York Business Divorce. …
Continue Reading Can’t Get Rid of Those Nooks and Crannies: Delaware Supreme Court Clarifies Implied Covenant of Good Faith and Fair Dealing

A recent ruling by Justice Timothy Driscoll in De Well Shipping Container Corp. v. Guo highlights the uncertainties and perils when clients, without their lawyers present, negotiate and sign an informal agreement settling a shareholder dispute with a buy-out. Read about it in this week’s New York Business Divorce.
Continue Reading Trouble Looms When Clients Negotiate Their Own Shareholder Buy-Out Settlement Agreements

It happens once in a while: the co-owners of a business entity formed under the laws of State X have a choice of law clause in their agreement opting to be governed by the laws of State Y. Such was the case in Gelman v. Gelman, recently decided by Justice Daniel Palmieri involving a dispute between sibling co-members of a Delaware LLC whose operating agreement had a New York choice of law provision. Which state’s law did the court apply? Get the answer in this week’s New York Business Divorce.
Continue Reading What Law Applies When Internal Affairs Doctrine Clashes With Choice-of-Law Clause?

As New York’s Suffolk County continues to grow its population and economy, so too grows the volume and complexity of business litigation in the courts of Suffolk County Supreme Court. This week’s New York Business Divorce focuses on the Suffolk County Commercial Division, with a sampling of three recent decisions of interest by Justices Emerson, Pines and Whelan involving shareholder disputes. …
Continue Reading Business Divorce Cases in the Suffolk County Commercial Division

“Is she or isn’t she a shareholder? Only her tax preparer knows for sure.” It may not be quite as catchy as the famous Clairol commercial, but it’s a good entreaty to read this week’s New York Business Divorce highlighting a recent appellate ruling in a dissolution case in which the petitioner unsuccessfully relied on tax returns to prove his shareholder status.
Continue Reading Form K-1s Do Not Always a Shareholder Make

A recent decision by Westchester Commercial Division Justice Alan D. Scheinkman in Briarcliff Solutions Holdings, LLC v. Fifth Third Bank (Chicago) takes the spotlight in this week’s New York Business Divorce, featuring a battle for control of the company’s Board of Directors and, ultimately, control of a lawsuit asserting claims against one ownership faction. Don’t miss it. …
Continue Reading Whose Lawsuit Is It Anyway?

For a variety of reasons, many closely-held corporations in New York and elsewhere choose to incorporate in Delaware. A Delaware Chancery Court decision last week, in Blaustein v. Lord Baltimore Capital Corp., serves as a good reminder of the perils of Delaware incorporation to minority shareholders. Learn more in this week’s New York Business Divorce.
Continue Reading Who Wants to Be a Minority Shareholder of a Delaware Closely-Held Corporation?