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Fall NYC Roundup

November was a whirlwind month for New York LLC litigation.  It featured disputes over how to wind up a judicially dissolved LLC, a bitter intra-family emergency indemnification/advancement injunction, and the finale of a decade-long battle over the enforceability of a partially baked operating agreement.  Some of these recent cases add clarity to the growing body of New York LLC caselaw. Others add confusion.  But all add precedential footholds for future arguments in disputes between members of New York LLCs. Members and their counsel take note.Continue Reading A Leaf Through a Busy November in New York LLC Litigation

The limited liability company is relatively young.  Though origin research is always a dubious task, my efforts tell me that the first LLC was created in 1977 in Wyoming, followed by other LLCs in Florida in 1982.  The years since then have witnessed the LLC’s rise to the closely held entity of choice among business owners.

One benefit of the LLC’s youthful age is that many of the minds that were most influential in its early-stage development are still teaching, practicing, and studying, all while continuing to lend their expertise on LLC formation, regulation, and litigation.  And your best chance of catching all those prominent minds in one place is at the American Bar Association’s annual LLC Institute.

For those interested in learning the intricacies of the LLC laws directly from the experts, I highly recommend attending the two-day conference.  While a single-post recap inevitably won’t do justice to the many presentations, panels, and discussions at the Institute, this week’s post attempts to sample some of the best business divorce topics highlighted in the 2024 LLC Institute.Continue Reading Greetings from the American Bar Association’s 2024 LLC Institute

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This week’s post concerns a decision out of the Delaware Chancery Court, in which the Court was tasked with determining whether the absolute litigation privilege bars the exercise of a contractual repurchase option triggered by claimed disparaging statements made in prior litigation.
Continue Reading Freedom (But with Consequences): In Delaware, Absolute Litigation Privilege Inapplicable to Nullify Contractual Non-Disparagement Repurchase Trigger

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At the 2023 LLC Institute recently held in Denver, CO, the NYBD authors had the pleasure of sharing their views from the Business Divorce trenches on emerging trends or potential trends in LLC litigation.  Here is a recap of the lively panel discussion, Frontiers of LLC Member Litigation: Sex Discrimination as Oppression, Freeze-Out Mergers, and Direct vs. Derivative Claims.
Continue Reading Greetings from the American Bar Association’s 2023 LLC Institute

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Statutes and caselaw have imposed several limitations on shareholders’ ability to enter into enforceable voting agreements. But those limitations apply in the corporate context—few have migrated over to LLC member voting agreements. And as a recent decision from the First Department demonstrates, LLC member voting agreements may have fewer formality requirements than one might expect.
Continue Reading First Department Recognizes Cause of Action for Specific Performance of LLC Member Voting Agreement

A claim for “usurpation of corporate opportunity” is simple to allege, but difficult to prove. Two recent cases out of the Manhattan Commercial Division and the U.S. District Court for the Southern District of New York explore the bounds of the corporate opportunity doctrine under New York and Delaware law.
Continue Reading A Recurring Business Divorce Feature: Usurpation of Corporate Opportunity