First Department

Subscribe to First Department via RSS

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

Unlike many states including Delaware, whose statutes authorize oral LLC agreements, New York’s LLC Law mandates a written operating agreement. A recent decision by the Appellate Division, First Department, permitting a claim based on an alleged oral LLC agreement to go forward, prompts examination of the pros and cons of oral LLC agreements, in this week’s New York Business Divorce. …
Continue Reading The Oral LLC Agreement: Boon or Bane?

Shareholder and LLC agreements, like other contracts, frequently contain terms accompanied by the proviso, “notwithstanding anything to the contrary in this Agreement,” signaling that the term trumps all others. Read this week’s New York Business Divorce to learn about a recent First Department appellate ruling in Schepisi v. Roberts highlighting the mischief that can result from multiple, ” dueling” notwithstanding clauses.
Continue Reading LLC Agreement Falters from Dueling “Notwithstanding” Clauses

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