Merit-based bonuses protected by the business judgment rule, or de facto dividends? That was the central question on which depended the outcome of a common-law dissolution claim in a case decided last month by a New York appellate panel involving a family-owned business. Learn more in this week’s New York Business Divorce.
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This week’s New York Business Divorce features brief summaries of a handful of noteworthy court decisions that escaped my attention last year, including a pair of decisions involving deadlock and oppressed minority shareholder disputes, and another pair of decisions involving receivership applications.
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Buy-sell agreements in shareholder agreements are supposed to avoid — not foment — litigation over the value of the interest being redeemed or sold. Matter of Grande’ Vie, LLC, decided last month by the Appellate Division, Fourth Department, tells a cautionary tale of a buy-sell provision gone wrong. Learn more about this important topic in this week’s New York Business Divorce.

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The hiring by one 50% business owner of legal counsel to take action in the company’s name against the other 50% owner is a frequent source of litigation. This week’s New York Business Divorce revisits the Caplash case, which involved this issue in the LLC context, on the occasion of a new decision by the Appellate Division, Fourth Department, affirming rulings by Justice Kenneth Fisher.

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Danger lurks for the dissolution petitioner and attorney who beforehand don’t thoroughly analyze whether the mere filing of a petition may trigger rights of first refusal in the shareholders’ agreement. This week’s New York Business Divorce highlights a recent appellate decision where the unwary petitioner fell into the self-made trap.

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