An appellate ruling last month in DeMatteo v. DeMatteo Salvage Co. brings to a close the cautionary tale of an 8-year court battle among members of a family-owned business over the enforcement of a poorly designed buy-sell agreement. It’s in this week’s New York Business Divorce.
Continue Reading An Ill-Fated Solution to an Ill-Fated Buy-Sell Agreement
Last week, in Pappas v. Tzolis, the Appellate Division, First Department, handed down a 3-2 decision reinstating claims for fiduciary breach and fraud brought by members of an LLC against another member who acquired their interests allegedly while keeping secret his negotiations to sell the LLC’s sole asset to an outside buyer at a drastically higher valuation. It’s an important decision likely headed to the New York Court of Appeals, and it’s in this week’s New York Business Divorce.
Continue Reading The Rise and Fall and Rise of Blue Chip: Fiduciary Duty Trumps Waiver in Latest First Department Decision
What do three recent decisions by the Wisconsin Supreme Court, the Appellate Division in Albany, and Nassau County Justice Ira Warshawsky have in common? They all involve disputes over poorly designed buyout agreements that fail to define critical terms. It’s in this week’s New York Business Divorce.
Continue Reading Failure to Define Terms in Buyout Agreements Leads to Litigation Woes
This week’s New York Business Divorce revisits the buy-out valuation contest going into its third year in Sassower v. 975 Stewart Avenue Associates, LLC, on the occasion of a recent decision by Justice Ira B. Warshawsky rejecting the parties’ dueling motions for summary judgment on the question whether the mortgage balance should be deducted from the subject company’s sole real estate asset in determining the purchase price of the minority interest being valued.
Continue Reading Sassower Case Illustrates Anew the Price of Poorly Drafted Buy-Sell Agreement
Including buy-sell provisions in a shareholders’ or operating agreement is a good idea, but if the agreement fails to clearly define basic valuation parameters it may lead to the very litigation that the agreement was intended to avoid. Case in point: Justice Ira Warshawsky’s recent decision in Sassower v. 975 Stewart Avenue Associates, LLC, featured in this week’s New York Business Divorce.
Continue Reading Case Illustrates Importance of Clear Valuation Parameters in Buy-Sell Agreement Among Owners of Closely Held Business
This week’s New York Business Divorce tells a cautionary tale about the perils business owners face when they negotiate a buy-sell agreement without counsel. Read about a recent case in which a court found a binding agreement based on an exchange of letters.
Continue Reading Court Grants Specific Performance of LLC Members’ Buy-Sell Agreement