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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.…
Continue Reading Past is Prologue: Refusal to Adopt Dividend Policy After Petitioner Resigns Not Ground for Dissolution

This week’s New York Business Divorce looks at partnerships — what gives them legal recognition and what doesn’t — in light of a recent appellate ruling dismissing a claim for breach of an oral partnership agreement. …
Continue Reading Calling an Organization a Partnership Doesn’t Make it One, But Not Calling it a Partnership Doesn’t Make it Not One. Got It?

Whatever doubts you may have had about the perils of using fixed-pricing in shareholder buy-sell agreements likely will be dispelled when you read this week’s New York Business Divorce highlighting a recent decision by the Appellate Division, Fourth Department, in Sullivan v. Troser Management, Inc.…
Continue Reading Missing Certificate of Value Spawns Decade-Long Lawsuit Over Buy-Sell Agreement

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.…
Continue Reading Some Winter Case Notes

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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Continue Reading Clash of the Clauses: Divided Appellate Panel Rules that “Binding” Appraisal Per Buy-Sell Agreement Must be Arbitrated

This week’s New York Business Divorce revisits an important topic, involving mandatory stock buybacks triggered by the filing of a dissolution petition, prompted by a recent decision by an upstate appellate court in Matter of Stevens (Allied Builders, Inc.).
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Continue Reading Appellate Court Rejects Mandatory Stock Buyback Triggered by Dissolution Petition

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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Continue Reading Appellate Court Affirms Caplash Ruling Rejecting Authority of 50% LLC Member to Hire Company Counsel in Proceedings Against Other 50% Member

Stock valuation junkies, this week’s New York Business Divorce is for you, as we examine a recent Fourth Department decision that weighs in on the controversial issue whether the discount for lack of marketability applies only to the company’s good will or to the entire enterprise value.
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Continue Reading Appellate Ruling in Stock Valuation Case Further Muddies the Marketability Discount Waters

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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Continue Reading Appellate Court Enforces Stock Buyback Triggered by Dissolution Petition