Second Department

Subscribe to Second Department via RSS

Can a court order the expulsion of an LLC member for misconduct absent language in the operating agreement so providing? Get the answer in this week’s New York Business Divorce highlighting a recent decision by the Appellate Division, Second Department, posing the issue in the context of a bitter dispute between two brothers.
…
Continue Reading Tzolis No Solace for Proponent of LLC Member Expulsion

On January 26th, in a case called Matter of 1545 Ocean Avenue, LLC, the Appellate Division, Second Department, became the first New York appellate court since the LLC Law’s enactment in 1994 to articulate a standard for judicial dissolution of limited liability companies. Read about Justice Leonard Austin’s scholarly opinion for the court, from which two justices dissented in part, in this week’s New York Business Divorce.
…
Continue Reading It Only Took 16 Years: New York Appellate Court Defines Standard for Judicial Dissolution of Limited Liability Companies

Fights over the good will value of a business are not uncommon in corporate dissolution and buyout proceedings. In this week’s New York Business Divorce, read about a recent appellate decision holding that courts lack authority to appraise good will post-dissolution in the absence of an agreement of the parties that good will is a distributable asset of the corporation.
…
Continue Reading Appellate Court Upholds Denial of Good Will Appraisal in Deadlock Dissolution Case

Did you know that the Surrogate’s Court has jurisdiction over corporate dissolution proceedings involving the estate of a deceased shareholder? Read more in this week’s New York Business Divorce highlighting a recent appellate decision affirming an award in favor of the estate of a minority shareholder arising from a petition for judicial dissolution of an accounting firm.
…
Continue Reading Majority Shareholders of Accounting Firm Held Liable for Value of Deceased Minority Shareholder’s Interest After They Formed New Firm Using Old Firm’s Assets and Good Will

A decision last week by the Second Department highlights a split of authority among New York’s intermediate appellate courts whether New York courts have subject matter jurisdiction over petitions to dissolve foreign business entities. Learn more in this week’s New York Business Divorce.
…
Continue Reading Appellate Rulings Clash Over Subject Matter Jurisdiction to Dissolve Foreign Business Entities

This week’s New York Business Divorce features a recent decision by the Appellate Division, Second Department, reversing the denial of a preliminary injunction centering on the enforceability of a written Nominee Agreement which acknowledged Party A as the “true owner” of a 50% stock interest in the corporation and appointed as his nominee Party B who otherwise was reflected as 100% owner in all of the corporation’s records and tax filings.
…
Continue Reading Nominee Agreement Trumps Corporation Records in Fight Over Stock Ownership

It’s a familiar story line to readers of this blog: LLC minority member sues for dissolution. Majority members adopt resolution requiring all members to contribute cash to pay legal expenses in the defense of the litigation. Plaintiff cries foul. See how it played out in a recent decision by the Appellate Division, Second Department, in this week’s New York Business Divorce.
…
Continue Reading LLC Dissolution Case Illustrates Peril to Minority Member of Compulsory Capital Contribution Provision in Operating Agreement

Last month the Appellate Division, Second Department issued an important decision concerning the application of the LLC Law’s default rules where the operating agreement is silent on a disputed issue. Get up to speed with this week’s New York Business Divorce.
…
Continue Reading Appellate Court Finds Operating Agreement “Silent” on Sale of LLC’s Sole Asset, Upholds Approval by Majority Vote Under Statute’s Default Rule

The laws authorizing “oppressed” minority shareholders to petition for corporate dissolution also give the majority shareholders the right to avoid litigating dissolution by electing to purchase the petitioner’s shares for fair value. This week’s New York Business Divorce highlights a recent case in which the court refused to permit an untimely election.
…
Continue Reading Timing is Everything When it Comes to the Buyout Election in Corporate Dissolution Cases

New York courts generally will apply a discount for lack of marketability in valuing the shares of closely held corporations in buyout proceedings triggered by judicial dissolution. Whether the discount applies only to goodwill, or to the entire enterprise value, may depend on which court you’re in. Find out more in this week’s New York Business Divorce.
…
Continue Reading Courts Differ on Application of Marketability Discount in Stock Valuation Proceedings