Derivative claims seeking recovery on behalf of the business entity frequently are brought in liitgation among the business’s co-owners. Often they are combined with direct claims seeking individual redress. A decision last week by a Manhattan appellate panel in Yudell v. Gilbert, featuring a signed opinion by Justice Karla Moskowitz, adopts Delaware’s approach to distinguish direct from derivative claims, which is crucial in determining whether the plaintiff must satisfy the requirement of pre-suit demand upon the entity’s controlling body. This week’s New York Business Divorce has the story.
Continue Reading Appellate Decision in Partnership Dispute Clarifies Distinction Between Direct and Derivative Claims
Winter Case Notes: A Partnership Masquerading as an LLC, and Other Recent Decisions of Interest
This week NYBD presents its annual Winter Case Notes summarizing several recent decisions of interest.
Second Department Denies Judicial Dissolution of Realty Holding Limited Partnership (and Related Claims), Ending 22-Count Dispute
When an aggrieved party feels his or her back against the wall, there is a strong temptation to assert every claim under the sun against the adversary. Offense is the best defense, so they say. But when the claims don’t stick, litigants may find that more isn’t necessarily more… but it sure can tie up a case for years, particularly in the backlogged Second Department.
Today’s case—Waldorf Invs. L.P. v Waldorf—offers a solid back-to-basics review of the issues that can be litigated when a limited partnership goes south (and the viability of those claims), but at the cost, figuratively and literally, of 8 years of litigation.Continue Reading Second Department Denies Judicial Dissolution of Realty Holding Limited Partnership (and Related Claims), Ending 22-Count Dispute
You Get What You Get, and You Don’t Get Upset: First Department Boots Limited Partner’s Claims Based on Plain Terms of Limited Partnership Agreement
This week’s New York Business Divorce showcases how courts reign in aggrieved limited partners whose demands stray from the plain terms of the limited partnership agreement
Continue Reading You Get What You Get, and You Don’t Get Upset: First Department Boots Limited Partner’s Claims Based on Plain Terms of Limited Partnership Agreement
Limo Company Shareholders Can’t Hitch a Ride in Derivative Litigation
In this week’s New York Business Divorce, read about the intervention rules and some of the challenges they pose for closely-held business owners hoping to intervene in derivative litigation.
Continue Reading Limo Company Shareholders Can’t Hitch a Ride in Derivative Litigation
LLCs, Direct vs. Derivative Claims, and Special Litigation Committees: A Lively Debate
This week’s New York Business Divorce offers readers a preview of two thought provoking articles by Professors Donald Weidner and Daniel Kleinberger published as point/counter-point in the current issue of The Business Lawyer on the subject of LLCs, the direct-derivative distinction, and Special Litigation Committees.
Continue Reading LLCs, Direct vs. Derivative Claims, and Special Litigation Committees: A Lively Debate
Equitable Standing in Shareholder Derivative Suit Bows to the Contemporaneous Ownership Rule
A plaintiff’s “equitable standing” to bring a shareholder derivative action is hardly a common issue in litigation of the sort, which makes all the more interesting last week’s decision by the Delaware Court of Chancery rejecting a plaintiff’s attempt to bypass the contemporaneous ownership rule. Read more in this week’s New York Business Divorce.
Continue Reading Equitable Standing in Shareholder Derivative Suit Bows to the Contemporaneous Ownership Rule
Singin’ the Derivative Plaintiff Blues
Pleading a derivative claim as direct, a direct claim as derivative, or intermingling direct and derivative claims, will likely invite time consuming and potentially expensive motion practice at the outset of a business divorce case. This week’s New York Business Divorce highlights the pitfalls.
Continue Reading Singin’ the Derivative Plaintiff Blues
Fee Sharing in LLC Derivative Suits: A Common Law Right and a One Way Street
In the wild west of LLC derivative lawsuits, the First Department’s recent decision in Bd. of Managers of 28 Cliff St. Condominium v Maguire, 2020 NY Slip Op 06844 [1st Dept Nov. 19, 2020] offers—albeit indirectly—an additional foothold for a successful plaintiff to assert his right to recover his fees from an award in favor of the LLC.
Continue Reading Fee Sharing in LLC Derivative Suits: A Common Law Right and a One Way Street
Limited Partnerships and the Self-Fulfilling Dissolution Petition
Partners of New York limited partnerships should sit up and take notice of a new, first-impression decision holding that the commencement of a dissolution proceeding against, or the appointment of a receiver for, the limited partnership can, in and of itself, result in withdrawal of the general partner and dissolution of the entity, even if the limited partnership agreement does not say so. Read about this important decision with profound implications for New York limited partnerships and their owners in this week’s New York Business Divorce.
Continue Reading Limited Partnerships and the Self-Fulfilling Dissolution Petition