This week’s New York Business Divorce features an intra-family battle concerning the precise contours of admittance as a “full” member of the family business.
For Embattled Bich Family, “Full Membership” Requires Admittance Without Precondition
Capital Call Cancelled: A Fairness Defense to the Majority’s Mandatory Capital Call
This week’s post unpacks a novel estoppel defense that put the brakes on the manager’s right to make a mandatory capital call.
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Is an LLC Bound by its Own Operating Agreement?
This week in New York Business Divorce, read how a New York LLC can successfully evade an arbitration provision in its own operating agreement.
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Dissolution Defined: The First Department’s Recent Guidance on Interpreting Operating Agreements
How does the First Department tackle competing interpretations of an LLC operating agreement? This week’s post explains.
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Scrivener’s Error Keeps Sailboat-Owning LLC Afloat
A court is empowered to correct a mistake solely in the reduction of an agreement to writing. This week’s post shows that power at work in the interpretation of a sailboat-owning LLC’s operating agreement.
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Never the Twain Shall Meet: Damages Claims Do Not Offset the Purchase Price in Buy-Sell Agreements
This week’s post considers a recent decision from New York County Commercial Division Justice Borrok, who offers well-reasoned guidance on the separateness between claims to specifically enforce a buy-sell agreement, on the one hand, and damages claims, on the other.
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The Operating Agreement Controls, Unless Public Policy Says Otherwise
This week’s post considers a duo of recent decisions concerning disputes between LLC members over the terms of their operating agreement. In the first case, the court considered whether to enforce an operating agreement as written despite evidence that the parties actually intended a different deal. In the second, the court considered whether to enforce an operating agreement where its buyout terms were grossly unfair. The cases’ different outcomes highlight the outer limits of the parties’ freedom of contract in LLC operating agreements.
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The Outer Limits of LLC Indemnification: Michael Cohen v Trump Organization
In this week’s New York Business Divorce, we tackle one of the most spectacular and well-publicized business falling-outs of modern times: Michael D. Cohen’s departure from the Trump Organization LLC, his resulting criminal conviction, and his cooperation with the Federal Government’s various investigations into activities surrounding former President Trump J. Trump. As an alleged former officer of the Trump Organization, Cohen sued the company for indemnification under its operating agreement for millions of dollars in legal fees resulting from the sprawling array of civil, administrative, and criminal proceedings against him. Learn how Cohen’s claims were resolved in this week’s New York Business Divorce.
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Swing and a Miss: Unopposed LLC Dissolution Claim Denied
In this week’s New York Business Divorce, a would-be LLC dissolution plaintiff goes down swinging on an unanswered complaint within an unopposed motion for a default judgment, just the latest example of New York courts closely scrutinizing the merits of LLC dissolution claims at the pleadings stage.
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A Shotgun Buy-Sell Agreement and an Email Deal Walk into a Beachside Bar . . .
The interaction between an LLC’s operating agreement and a subsequent, informal deal between the members raises difficult questions surrounding the enforceability of either agreement. In a recently-filed Manhattan Commercial Division case, the Court granted the plaintiff a preliminary injunction, signaling to the parties that the plaintiff was likely to succeed on his claim to enforce the informal deal notwithstanding arguably contrary provisions in the operating agreement. The case reminds us that the formality requirements of an LLC operating agreement may give way to an informal agreement when both LLC members manifest their intent to be bound by the informal agreement.
Continue Reading A Shotgun Buy-Sell Agreement and an Email Deal Walk into a Beachside Bar . . .