First Department

Subscribe to First Department via RSS

Derivative claims are frequently asserted in business divorce litigation. Within the last two months the Manhattan-based Appellate Division, First Department, issued three decisions addressing the demand futility requirement in derivative lawsuits involving Delaware and New York corporations, limited partnerships and LLCs. Get up to speed with this week’s New York Business Divorce.
Continue Reading Recent Appellate Rulings Address Demand Futility in Derivative Lawsuits

Common-law dissolution makes another rare appearance in a recent appellate ruling by the First Department in Gjuraj v. Uplift Elevator, which may be the only reported common-law dissolution case in which a plaintiff won at trial. Don’t miss it in this week’s New York Business Divorce. …
Continue Reading Successful Common-Law Dissolution Case Survives Appeal, But Remedy Limited to Buy-Out

A long-running litigation battle between a technology and marketing company and its minority shareholder investors took yet another twist last week when the Appellate Division, First Department, reversed a lower court order upholding the company’s cancellation of the minority shares and the loss of their preemptive rights. Get the full story in this week’s New York Business Divorce.
Continue Reading Appellate Court Cancels Corporation’s Cancellation of Minority Shares

This week’s New York Business Divorce, highlighting a recent appellate ruling in Born to Build, LLC v. 1141 Realty, LLC, tells an unusual tale about an ultimately unsuccessful effort to dissolve a limited liability company by someone who claimed to have acquired through judgment enforcement proceedings a debtor’s undocumented membership interest in the LLC. …
Continue Reading For Sale: Undocumented LLC Membership Interest. Cheap.

Section 62 of the New York Partnership Law recognizes a partner’s right unilaterally to dissolve a partnership unless the partnership agreement has a “definite term” or a “particular undertaking is specified.” Last month, in Gelman v. Buehler, the New York Court of Appeals construed these terms for the first time in the almost 100 years since they’ve been on the books. Read all about it in this week’s New York Business Divorce.
Continue Reading New York’s High Court Rules on Unilateral Dissolution of Partnerships

This week’s New York Business Divorce looks at two recent decisions by appellate courts in New York and Massachusetts in which dissident shareholder/directors sought access to the other directors’ communications with corporate counsel. Did they succeed? Read on to find out. …
Continue Reading Can “Adverse” Shareholder/Director Access Privileged Communications With Corporate Counsel?

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

The New York Court of Appeals heard oral argument this month of an appeal from the Appellate Division, First Department’s split decision in Pappas v. Tzolis pitting fiduciary duty against contractual waiver in the context of an intra-member buy-out of LLC membership interests. This week’s New York Business Divorce provides highlights of the oral argument and links to the argument’s webcast, the parties’ briefs, and other background materials. …
Continue Reading Does Waiver Trump Fiduciary Duty? Court of Appeals Hears Argument in Pappas v. Tzolis

Derivative claims seeking recovery on behalf of the business entity frequently are brought in liitgation among the business’s co-owners. Often they are combined with direct claims seeking individual redress. A decision last week by a Manhattan appellate panel in Yudell v. Gilbert, featuring a signed opinion by Justice Karla Moskowitz, adopts Delaware’s approach to distinguish direct from derivative claims, which is crucial in determining whether the plaintiff must satisfy the requirement of pre-suit demand upon the entity’s controlling body. This week’s New York Business Divorce has the story.
…
Continue Reading Appellate Decision in Partnership Dispute Clarifies Distinction Between Direct and Derivative Claims