Last week’s decision by a Manhattan appellate panel in Barone v. Sowers reaffirms its holding two years ago in Doyle v. Icon, LLC that a minority member of an LLC cannot solely rely on allegations of oppression by the majority member to survive a pretrial motion for dismissal of a dissolution claim. Learn more in this week’s New York Business Divorce.
Continue Reading Oppression Claims Don’t Cut It in LLC Dissolution Cases
Disputes over shareholder buy-outs continue to generate interesting court decisions addressing whether the purchasing controller has an affirmative, fiduciary duty of disclosure, as in Brummer v. Red Rabbit, LLC, highlighted in this week’s New York Business Divorce.
Continue Reading Another Case of Seller’s Remorse Bites the Dust
In the face of Second Department case law rejecting subject-matter jurisdiction over statutory dissolution claims involving foreign business entities, the plaintiffs in Bonavita v Savenergy, Inc. argued to Justice Timothy Driscoll that he nonetheless could hear a claim for common-law dissolution of a Delaware corporation. Did they succeed? Find out in this week’s New York Business Divorce.
Continue Reading Court Declines Jurisdiction Over Claim for Common-Law Dissolution of Delaware Corporation
Does an LLC subscription agreement, barring transfer of “any interest therein,” bar the later transfer of the acquired membership interest? The answer, recently provided by a Manhattan appellate panel in Gartner v. Cardio Ventures, LLC, is discussed in this week’s New York Business Divorce.
Continue Reading LLC Subscription Agreement No Bar to Transfer of Membership Interest
A Manhattan appellate panel’s ruling last month provides a cautionary lesson about the need to anticipate and address tax issues, including potential taxes on phantom income, when negotiating buyout settlements involving shares in passthrough entities. You’ll find it in this week’s New York Business Divorce.
Continue Reading Negotiating a Buyout? Don’t Overlook Taxes on Phantom Income
A decision last week by a Manhattan appellate panel eases the way for books-and-records proceedings brought by shareholders seeking corporation records evidencing misconduct by officers and directors. Find out more in this week’s New York Business Divorce.
Continue Reading A Boost for Books-and-Records Proceedings
A Manhattan appellate panel recently ordered a trial in a suit between the estate of a deceased law firm partner and the surviving partner over whether the latter’s post-death admission of a new partner was part of an alleged “sham” transaction designed to defeat the estate’s entitlement to receive half the firm’s assets upon dissolution and liquidation. You won’t want to miss it in this week’s New York Business Divorce.
Continue Reading Court in Law Firm Dissolution Suit Must Decide, Was Partnership a “Sham”?
Pass-through tax entities including S corporations and LLCs can create personal tax liability on so-called phantom income, that is, undistributed net income allocated on Form K-1. A case recently decided by a Manhattan appeals court tells the tale of a selling shareholder’s costly failure to deal with the issue of phantom income in a stock buy-out agreement. This week’s New York Business Divorce has the story.
Continue Reading Stock Redemption Agreement Forecloses Seller’s Suit for Tax Liability on Phantom Income
Last week’s decision by the Appellate Division, First Department, in Pokoik v. Pokoik appears to be the first appellate ruling applying the safe-harbor provision in Section 409 of New York’s LLC Law governing duties of managers. Learn more about this important development in this week’s New York Business Divorce.
Continue Reading Appellate Court Rejects LLC Manager’s Safe-Harbor Defense, Finds Breach of Fiduciary Duty
In this week’s New York Business Divorce you’ll read about two recent cases in which New York courts decided disputes between members of Delaware LLCs over the interpretation of provisions — one dealing with a distribution waterfall and the other with compulsory buyback of membership interests — found in highly sophisticated operating agreements.
Continue Reading Waterfalls and Compulsory Buybacks: New York Courts Decide Disputes Involving Sophisticated Delaware LLC Agreements