In the wild west of LLC derivative lawsuits, the First Department’s recent decision in Bd. of Managers of 28 Cliff St. Condominium v Maguire, 2020 NY Slip Op 06844 [1st Dept Nov. 19, 2020] offers—albeit indirectly—an additional foothold for a successful plaintiff to assert his right to recover his fees from an award in favor of the LLC.
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Gische
New York and Delaware Courts Decide Disputes Over Accounting Firm Buyouts
This week’s New York Business Divorce features a pair of recent decisions by New York and Delaware courts addressing disputes between accounting firms and departing partners over entitlement to buy-out payments. Both are highly interesting decisions, especially for anyone involved in drafting agreements for professional firms.
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Beware Taxes on Phantom Income When Entering Into Shareholder Buy-Out Agreement
Tax analysis is a critical part of the business divorce attorney’s job when it comes to fashioning a shareholder buy-out agreement that, among other things, protects the selling shareholder from personal income tax liability on non-distributed or “phantom” net income that later may show up on the shareholder’s Schedule K-1. This week’s New York Business Divorce looks at a recent decision by Manhattan Supreme Court Justice Judith Gische in a fight over the tax consequences of a buy-out settlement of a corporate dissolution.
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Post-Tzolis Rulings Address Demand and Contemporaneous Ownership Requirements for LLC Derivative Actions
The Court of Appeals in Tzolis v. Wolff authorized derivative suits on behalf of LLCs. This week’s New York Business Divorce looks at two post-Tzolis lower court decisions addressing pre-action demand and contemporaneous ownership requirements for such suits.
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Mandatory Arbitration of Dissolution Proceedings
Do broad arbitration clauses in shareholders’ agreements mandate arbitration of petitions for involuntary corporate dissolution? Find out in this week’s New York Business Divorce.
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