There’s been a spate of recent court decisions concerning the authority of one 50% business owner to hire counsel to represent the company adverse to the other 50% owner. This week’s New York Business Divorce looks at two new decisions, one from New York and one from Delaware.
…
Continue Reading Delaware and New York Courts Agree that 50% LLC Member May Not Hire Lawyer to Represent Company Adverse to Other 50% Member

Justice Ira Warshawsky of Nassau County Supreme Court’s Commercial Division has issued a “BIG” decision (as in discount for Built-In Gains tax) in a stock valuation arising out of a dissolution proceeding brought by minority shareholders claiming oppression. Read about it in this week’s New York Business Divorce.
…
Continue Reading Court Discounts Fair Value Award for Built-In Gains Tax in Shareholder Oppression Case

A post-trial decision by Westchester Supreme Court Justice Alan Scheinkman tackles a novel remedial issue in an LLC dissolution involving 50-50 partners who went from friendship to fisticuffs over their vending machine business. Read about it in this week’s New York Business Divorce.
…
Continue Reading Court Orders Return of Investment as Equitable Remedy in LLC Dissolution Proceeding

It’s not often that bankruptcy law intersects with corporate dissolution proceedings based on deadlock or minority shareholder oppression, but when it does, likely it’s bad news for the petitioner seeking to liquidate the company or to be bought out by another shareholder. A recent decision by Kings County Supreme Court Justice Carolyn Demarest illustrates why, in this week’s New York Business Divorce.
…
Continue Reading Failure to Disclose Stock Interest in Bankruptcy Petition Defeats Standing in Later Dissolution Proceeding

This week’s New York Business Divorce looks at a recent case in which the managing member of an LLC, relying on the operating agreement’s indemnity provision, sought to sell company assets for various purposes including payment of her own legal fees to defend against an action brought by the other members to remove her as manager.
…
Continue Reading Indemnity Provision Can Tilt the Playing Field in Litigation Between Business Partners

An important appellate decision issued last week, sustaining a complaint alleging concealment of financial projections impacting on share price, demands the attention of business owners and their counsel considering the buyout of a minority partner. Read about it in this week’s New York Business Divorce.
…
Continue Reading Decision Lowers the Bar for Former Partner’s Claims of Fraudulent Buyout

A recent federal court decision, ruling that communications between an LLC’s attorney and its managers are immune from discovery in litigation brought by an LLC member, merits this special mid-week report in New York Business Divorce.
…
Continue Reading LLC Member Disputes and the Attorney-Client Privilege

When 50-50 business partners have a falling out, the ensuing battle for the high ground can lead one of them to take hostile action in the company’s name without the other’s consent. A new decision on the subject by Justice Kenneth Fisher launches this week’s New York Business Divorce.
…
Continue Reading Caplash Redux: 50% Member Cannot Hire Lawyer to Represent LLC in Dispute with Other 50% Member

This week’s New York Business Divorce highlights a recent decision dismissing a complaint by a former shareholder, brought after he already won a judgment in a dissenting shareholder stock appraisal, seeking to compel the company to pay him additional “tax dividend” distributions.
…
Continue Reading Dissenting Shareholder Loses Right to Receive Dividends Upon Merger Consummation

This week’s New York Business Divorce examines an intriguing case involving an LLC whose operating agreement required a member to transfer his interest to the other members because of his filing of a divorce action against his wife. When the divorcing member refused to do so, he bought himself a second divorce litigation, of the business kind.
…
Continue Reading LLC Member’s Marital Woes Lead to Loss of Membership Interest