In this week’s New York Business Divorce, read about several strands of case law employing different language to express the same concept: a closely-held business interest transfer restriction or buy-sell agreement that would impose a “forfeiture,” cause the interest to become “void,” result in “annihilation of property,” or “bestow a windfall” upon a co-owner, is unenforceable as against public policy.
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buy-sell agreement
Never the Twain Shall Meet: Damages Claims Do Not Offset the Purchase Price in Buy-Sell Agreements

This week’s post considers a recent decision from New York County Commercial Division Justice Borrok, who offers well-reasoned guidance on the separateness between claims to specifically enforce a buy-sell agreement, on the one hand, and damages claims, on the other.
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Look Before You Leap: Buy-Sell Agreements Triggered by a Petition for Dissolution

In a case featuring your authors as counsel for the prevailing parties, NY County Commercial Division Justice Robert Reed enforces the buy-sell provision of a corporation’s shareholders agreement triggered by the shareholders’ petition for dissolution. …
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Everything You Ever Wanted to Know About Buy-Sell Agreements: A Conversation With Paul Hood

Paul Hood, one of the leading experts on buy-sell agreements, has a new book on the subject highlighted in this week’s New York Business Divorce and also featured in an interview with Paul on a new episode of the Business Divorce Roundtable podcast.
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Holes in Shotgun Buy-Sell Agreement Keep Deadlock Dissolution Petition Alive

Does an LLC’s member’s pulling the trigger on a shotgun buy-sell agreement foreclose a petition for deadlock-based dissolution? Not if the members can’t agree on the terms of the sale, holds Vice Chancellor Slights. …
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A Shotgun Buy-Sell Agreement and an Email Deal Walk into a Beachside Bar . . .

The interaction between an LLC’s operating agreement and a subsequent, informal deal between the members raises difficult questions surrounding the enforceability of either agreement. In a recently-filed Manhattan Commercial Division case, the Court granted the plaintiff a preliminary injunction, signaling to the parties that the plaintiff was likely to succeed on his claim to enforce the informal deal notwithstanding arguably contrary provisions in the operating agreement. The case reminds us that the formality requirements of an LLC operating agreement may give way to an informal agreement when both LLC members manifest their intent to be bound by the informal agreement.
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A Partnership Dissolution in Three Acts Over Fifteen Years and Counting

It’s no match for Jarndyce v. Jarndyce, but 15 years is some sort of record for litigating the breakup of a single-asset real estate partnership during which one of the partners died, triggering the other’s option to purchase under a fixed-price formula. Read about it in this week’s New York Business Divorce.
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Consider Whether Your Buy-Sell Provision is a Call Option Before Pulling the Trigger

This week’s New York Business Divorce, authored by Peter J. Sluka, looks at a first-impression decision by the Delaware Chancery Court in which the court characterized a shareholder buy-out provision as a call option, with consequences for the company’s attempt to revoke its initiation of the buy-out. …
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This Single-Appraiser Buy-Sell Agreement Was Asking for Trouble

This week’s New York Business Divorce highlights a recent decision by Justice Joel M. Cohen in a fascinating, high stakes case involving an allegedly “rigged” appraisal pursuant to a repurchase option in an LLC agreement. …
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Another Reason Not to Use Fixed Price Buy-Sell Agreements

If someone proposes to you a fixed price buy-sell agreement, run the other way, but not without first reading this week’s New York Business Divorce. …
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