Last month the Appellate Division, Second Department issued an important decision concerning the application of the LLC Law’s default rules where the operating agreement is silent on a disputed issue. Get up to speed with this week’s New York Business Divorce.
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Continue Reading Appellate Court Finds Operating Agreement “Silent” on Sale of LLC’s Sole Asset, Upholds Approval by Majority Vote Under Statute’s Default Rule

If you think you’ve seen it all when it comes to corporate dissolution contests, think again as you read this week’s New York Business Divorce which looks at a case in which one LLC member opposed the other’s dissolution petition based on the latter’s alleged mental disability.
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Continue Reading Poorly Drafted Disability Clause in Operating Agreement Provides Novel Defense to LLC Dissolution Proceeding

The necessity of an evidentiary hearing is a threshold issue in corporate dissolution proceedings. A recent decision by Suffolk County Commercial Division Justice Emily Pines serves up a good illustration of how courts approach the issue. Read more in this week’s New York Business Divorce.
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Continue Reading Disputed Allegations of Shareholder Oppression Require Evidentiary Hearing

The laws authorizing “oppressed” minority shareholders to petition for corporate dissolution also give the majority shareholders the right to avoid litigating dissolution by electing to purchase the petitioner’s shares for fair value. This week’s New York Business Divorce highlights a recent case in which the court refused to permit an untimely election.
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Continue Reading Timing is Everything When it Comes to the Buyout Election in Corporate Dissolution Cases

Say goodbye to Joe the Plumber, say hello to Joe the Shareholder who makes his debut in this week’s New York Business Divorce as we examine the rights under employment law of a minority shareholder whose employment with his own company is terminated by the controlling shareholders.
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Continue Reading Dissolution May Be Sole Remedy When Minority Shareholder’s At-Will Employment is Terminated

“Eat and drink with your relatives; do business with strangers.” This Greek proverb gets sorely tested by the case featured in this week’s New York Business Divorce, involving a Greek restaurant business in which one of the shareholders died after filing for dissolution and the other then sought to enforce a buyback provision in the shareholders’ agreement.
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Continue Reading Court Enforces Stock Buyout Triggered by Shareholder’s Death Notwithstanding Pending Dissolution Proceeding

The Delaware Court of Chancery last week issued a ruling of first impression applying the statute of frauds to invalidate an alleged oral LLC operating agreement. Will the ruling have any impact on New York LLCs? Find out in this week’s New York Business Divorce.
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Continue Reading Delaware Court Applies Statute of Frauds to LLC Operating Agreement

Professional service corporations are “interesting” and “strange creatures”, says Justice Ira B. Warshawsky in a recent decision rejecting a claim for statutory buyout in a suit brought by a terminated partner in a law firm organized as a professional corporation. Get the story in this week’s New York Business Divorce.
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Continue Reading Terminated Member of Professional Corporation is Not Entitled to Statutory Stock Redemption

When it comes to rulings by its Court of Chancery, what happens in Delaware definitely does not stay in Delaware. This week’s New York Business Divorce looks at a recent decision by that important court, dismissing a petition for judicial dissolution of a Delaware LLC.
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Continue Reading Delaware Court of Chancery Narrowly Construes LLC Dissolution Statute

When company co-owners fight, “Duck for cover!” may be the best advice for the company’s outside accountant. In this week’s New York Business Divorce, read about a CPA firm that got caught in the crossfire of a dissolution contest and ended up having to defend itself against allegations of improper partisanship.
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Continue Reading Certified Partisan Accountant? Court Allows LLC Member’s Suit Against Company’s CPA, Alleging Improper Assistance to Other Member in Judicial Dissolution Proceeding