This week’s New York Business Divorce features an important decision last month by Justice Vito DeStefano in which he upheld a claim for advancement of legal fees incurred by a close corporation minority shareholder, director and former officer, who initiated suit against the controlling shareholder, in defending counterclaims asserted in the name and right of the company.
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Tenant-shareholders in co-op apartments occasionally fall into the same kinds of internal disputes over corporate governance experienced by shareholders in any other kind of closely held corporation. This week’s New York Business Divorce highlights a recently decided battle for board seats among co-owners of a small Manhattan co-op, in which the outcome turned on the court’s construction of arguably out-of-sync provisions in the by-laws and shareholders’ agreement.
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What are the powers of the president of a close corporation to make major decisions in the ordinary course of business, such as entering leases, without obtaining board approval? Does it matter if the president knows he or she cannot obtain board approval for the proposed action? Read this week’s New York Business Divorce to see how these questions were answered by Rochester Commercial Division Justice Kenneth Fisher in a fascinating case pitting brother against brother in Hellman v. Hellman.

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Corporate bylaw provisions governing the number of directors and procedures for their appointment can sometimes play a critical role in the outcome of disputes among shareholders of closely held corporations, as illustrated in a recent case highlighted in this week’s New York Business Divorce involving a small residential co-op.

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