Did you know that not-for-profit corporations can also be the subject of judicial dissolution proceedings stemming from disputes among the members? A rare example recently made the news in the aftermath of a bloody brawl at a non-profit religious center in Richmond Hill, Queens. Justice Agate’s decision in Matter of Singh is featured in this week’s New York Business Divorce.
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Continue Reading Judicial Dissolution of the Not-For-Profit Corporation

Last week the Appellate Division, Third Department, handed down its second ruling in four months in cases involving dueling dissolution petitions. Its latest decision, in Matter of Clever Innovations, Inc., affirms the denial of a deadlock petition and the grant of a compulsory buy-out based on an oppressed shareholder petition. It’s in this week’s New York Business Divorce.
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Continue Reading Dueling Dissolution Petitions Lead to Forced Buy-Out of 50% Shareholder

A recent appellate decision in Armentano v. Paraco Gas Corp. reinstated a minority shareholder’s complaint charging the controlling shareholders with diluting his stake by issuing treasury shares to themselves. It’s in this week’s New York Business Divorce.
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Continue Reading Minority Shareholder Wins Appeal Challenging Grant of “Bonus” Treasury Shares to Controlling Shareholders

When it comes to documenting ownership of closely held corporations, as Art Linkletter would have said, shareholders do the darndest things. There’s no better illustration of this than Matter of Sunburst Associates, Inc. decided last week by the Appellate Division, Third Department, in a judicial dissolution proceeding brought by a putative 50% shareholder. This week’s New York Business Divorce has the story.
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Continue Reading Inconsistent Documents and Conflicting Testimony Cloud Stock Ownership Issue in Corporate Dissolution Case

Delaware decisional law holds that members of a Delaware LLC may eliminate the LLC manager’s default fiduciary duties by explicit disclaimer in the LLC agreement. In its decision last month in Kagan v. HMC-New York, Inc., a divided panel of the Appellate Division, First Department, disagreed whether the wording of a fiduciary disclaimer in an LLC agreement was sufficiently precise to warrant summary dismissal of fiduciary breach claims. Learn more about this important topic in this week’s New York Business Divorce.
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Continue Reading Elimination of LLC Manager’s Fiduciary Duties Divides Appellate Panel

This week’s New York Business Divorce presents an informative interview on the topic of business divorce litigation with the Honorable Justice Ira B. Warshawsky, who recently retired after 25 years on the bench. You won’t want to miss it.
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Continue Reading The Judicial Perspective on Business Divorce Litigation: Interview with Hon. Ira B. Warshawsky

Litigation over capital contributions by LLC members once again takes center stage in this week’s New York Business Divorce. The featured decision by Justice Emily Pines in Duff v. Curto highlights the risks taken when business partners fail to define capital obligations in the operating agreement.
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Continue Reading The Importance of Defining Capital Contributions in the LLC Agreement

Justice Thomas Whelan, the newest member of Suffolk County Supreme Court’s Commercial Division, offers some important procedural guidance concerning dismissal motions in dissolution proceedings in a decision last month in Matter of Langella. It’s in this week’s New York Business Divorce.
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Continue Reading A Question of Procedure: Are Merits-Based Pre-Answer Dismissal Motions Allowed in Dissolution Proceedings?

A lawsuit among siblings who co-own a business that owns and operates a boat yard is fodder for an interesting decision earlier this month by Suffolk County Commercial Division Justice Elizabeth Emerson in Gillette v. Sembler. The decision, which addresses the requirement for pre-suit demand for derivative claims, is featured in this week’s New York Business Divorce.
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Continue Reading Family Feud Highlights Hurdles to Derivative Actions Against Close Corporation Directors

Last week’s New York Business Divorce looked at Auriga Capital v. Gatz in which Chancellor Leo Strine of the Delaware Chancery Court undertook a comprehensive analysis of LLC manager fiduciary duties under Delaware law. This week’s post takes a comparative look at New York LLC manager duties.
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Continue Reading What Does Chancellor Strine’s Auriga Capital Decision Teach Us About Fiduciary Duties of New York LLC Managers? (Part Two)