In its ruling last week in Carr v Global Payments Inc., the Delaware Court of Chancery had to decide whether to reverse its prior order requiring advancement of a former corporate officer’s litigation expenses after the company subsequently amended its complaint in the underlying suit for the precise purpose of avoiding advancement. Find out what happened in this week’s New York Business Divorce.
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Is a former director and officer entitled to advancement of legal fees incurred in the defense of legal claims asserted against her by the corporation? That was the question decided by VC Glasscock of the Delaware Chancery Court in a case where the corporate charter’s indemnification and advancement provisions were not a model of clarity.
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The implied covenant of good faith and fair dealing continues to sow confusion as to its utility and application in disputes among business co-owners, in which often it is misconceived as a quasi-fiduciary claim invoking the court’s equity powers to right any wrong, when in fact it is a narrow, contract-based doctrine. A recent Delaware Chancery Court decision provides a highly useful guide, as explained in this week’s New York Business Divorce.
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This 6th annual edition of Summer Shorts presents brief commentary on three decisions of interest in business divorce cases, including a dispute among LLP partners over the reduction of one partner’s interest; disqualification of counsel in an LLC dissolution case; and a Delaware books-and-records case involving phantom stock.
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Is an LLC membership interest forfeited or reduced when a member fails to make a required capital contribution? That was the threshold issue in a decision last week by the Delaware Chancery Court in Grove v. Brown, where the LLC’s financial success in its first year led to acrimony and litigation. Get the answer in this week’s New York Business Divorce.
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Compared to its Business Corporation Law, New York’s LLC Law provides greater latitude to LLC members when it comes to making management decisions without necessity of holding a formal meeting. A recent Delaware Chancery Court decision construing that state’s similar LLC statute sheds light on the interplay between the statutory default rule and operating agreement provisions that set forth voting procedures without mention of the members’ right to take action without a meeting. It’s in this week’s New York Business Divorce.

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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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