If you’re an LLC member or member’s lawyer thinking about expelling a misbehaving co-member, but without authorization to do so in the operating agreement, read this post and think again.
Continue Reading Repeat After Me: You May Not Expel a Member of a New York LLC Unless the Operating Agreement Says So
Basics of Valuation Proceedings – Litigating an Appraisal from Start to Finish – Part 2

In this week’s New York Business Divorce – the second in a three-part series – learn about the legal rules and principles governing partnership, corporation, and limited liability company appraisal proceedings.
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A River’s Divide: Time for the Manhattan and Brooklyn Appellate Courts to Agree on Marketability Discount in Fair Value Proceedings

Should courts apply a marketability discount in determining the fair value of interests in realty holding companies? In downstate New York, the answer may vary depending on whether the court lies within the First or Second Departments of the Appellate Division. This week’s New York Business Divorce has the story. …
Continue Reading A River’s Divide: Time for the Manhattan and Brooklyn Appellate Courts to Agree on Marketability Discount in Fair Value Proceedings
Top 10 Business Divorce Cases of 2015

New York Business Divorce proudly presents its eighth annual list of the past year’s ten most noteworthy business divorce cases, along with short summaries and links to prior posts on the featured cases. Happy Holidays!
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Summer Shorts: Member Expulsion and Other Recent Decisions of Interest

Traditions are good. This blog has two annual traditions. First, at the end of each year I write a post listing the year’s top ten business divorce decisions. Second, each August I offer readers who are (or ought to be) on summer vacation some light reading in the form of three, relatively short case summaries.
So here we are in what’s been a particularly felicitous August weather-wise (at least here in the Northeast U.S.), with another edition of Summer Shorts. This edition’s summaries feature two out-of-state cases — one from Florida involving expulsion of an LLC member and one from Delaware involving the valuation upon redemption of an LLC member’s interest — and a New York appellate court decision involving the removal of a limited partnership’s general partner.
The Anti-Chiu: Florida Court Upholds LLC Member’s Expulsion
Froonjian v Ultimate Combatant, LLC, No. 4D14-662 [Fla. Dist. Ct. App. May 27, 2015]. The Florida intermediate appellate court’s ruling in Froonjian makes for a fascinating contrast with New York case law represented most prominently by the Second Department’s 2010 decision in Chiu v Chiu holding that, absent express authorization in the LLC’s operating agreement, a member’s involuntary expulsion is not permitted. Going 180° in the other direction, the Froonjian court upheld the majority members’ expulsion of a minority member from a Florida LLC that had no operating agreement, reasoning that the Florida default statute vesting all decision-making authority in the members acting by majority vote encompasses the authority to expel a member.
Continue Reading Summer Shorts: Member Expulsion and Other Recent Decisions of Interest
Appellate Court Upholds 0% Marketability Discount in LLC Fair Value Case

A Brooklyn appellate panel last week provided more fodder for the DLOM debate that’s been in the legal news of late, upholding a 0% DLOM in a fair value appraisal of a membership interest in a real estate holding company. It’s featured in this week’s New York Business Divorce.
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Top Ten Business Divorce Cases of 2012

This week’s New York Business Divorce rings in the New Year with its fifth annual list of the past year’s ten most significant business divorce cases, also providing short summaries and links to prior posts on the featured cases. Happy New Year!
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Appellate Court Directs 16% Marketability Discount in Fair Value Buy-Out of Realty Companies, Affirms Discount for Future Built-In Gains Tax at Present Value

An important decision last week by the Appellate Division, First Department, in Giaimo v. Vitale directed the application of stock valuation discounts for lack of marketability and built-in gains taxes in a case involving closely held, subchapter C real estate holding corporations. It’s must reading for business appraisers and business divorce lawyers, in this week’s New York Business Divorce. …
Continue Reading Appellate Court Directs 16% Marketability Discount in Fair Value Buy-Out of Realty Companies, Affirms Discount for Future Built-In Gains Tax at Present Value
Court Rejects Marketability Discount in LLC Fair Value Case

In the second of two posts on the recent post-trial decision in Chiu v. Chiu, involving the disputed ownership of a single-asset real estate holding company, this week’s New York Business Divorce focuses on the court’s rejection of a discount for lack of marketability in determining the fair value of the withdrawing member’s 10% interest.
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Continue Reading Court Rejects Marketability Discount in LLC Fair Value Case
Court Recasts Advances as Capital Contributions in Determining LLC Members’ Ownership Percentages

This week’s New York Business Divorce revisits the fascinating case of Chiu v. Chiu on the occasion of a post-trial decision by Justice Allan Weiss in this long-running battle between two brothers over the ownership and valuation of a real estate holding company. Don’t miss it!
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Continue Reading Court Recasts Advances as Capital Contributions in Determining LLC Members’ Ownership Percentages