Warshawsky

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The Appellate Division, Second Department last week affirmed the key rulings by Justice Ira Warshawsky in the Murphy v. U.S. Dredging valuation case, including his application of a marketability discount to entire enterprise value rather than limiting it to good will. Learn more in this week’s New York Business Divorce.
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Continue Reading Ruling on Valuation Discounts for Marketability, Built-In Gains Tax Ends Rift Among New York Appellate Courts

Courts generally will enforce broad arbitration clauses in shareholders’ agreements to compel arbitration of corporate dissolution disputes. This week’s New York Business Divorce highlights an interesting, recent decision by Justice Ira B. Warshawsky in which he denied a request to compel arbitration of a dissolution petition based on limiting language in a separate termination clause in the shareholders’ agreement.
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Continue Reading Court Denies Arbitration of Corporate Dissolution Petition Notwithstanding Broad Clause

As if we needed another lesson in the perils of failing to enter into a written shareholders’ agreement, last week the Appellate Division, Second Department, affirmed a lower court ruling rejecting a buyout demand by the expelled shareholder of a law firm organized as a professional corporation. It’s in this week’s New York Business Divorce.
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Continue Reading Neither Statute Nor Public Policy Supports Buyout Right of Terminated Professional Corporation Shareholder

Shareholder and operating agreements typically contain provisions restricting the right to transfer stock or membership interests. A recent decision by Justice Ira Warshawsky in Verderber v. Commander Enterprises Centereach, LLC, in which he refused to grant a preliminary injunction enforcing a transfer restriction, prompts this week’s New York Business Divorce to examine the ancient rule against unreasonable restraints on alienation.
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Continue Reading Beware Unreasonable Restraints on Alienation When Drafting Shareholder and Operating Agreements

A one-of-a-kind, high-stakes dissenting shareholder appraisal proceeding is the subject of a fascinating decision by Justice Ira Warshawsky, in which he tackles disputes over trapped-in capital gains, marketability and minority discounts, widely disparate expert valuations, and entitlement to attorney’s fees and interest. Read about it in this week’s New York Business Divorce.
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Continue Reading Court Determines Fair Value in Dissenting Shareholder Case Triggered by REIT Conversion

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.
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Continue Reading Appellate Court Upholds Denial of Good Will Appraisal in Deadlock Dissolution Case

Including buy-sell provisions in a shareholders’ or operating agreement is a good idea, but if the agreement fails to clearly define basic valuation parameters it may lead to the very litigation that the agreement was intended to avoid. Case in point: Justice Ira Warshawsky’s recent decision in Sassower v. 975 Stewart Avenue Associates, LLC, featured in this week’s New York Business Divorce.
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Continue Reading Case Illustrates Importance of Clear Valuation Parameters in Buy-Sell Agreement Among Owners of Closely Held Business

Two feuding 50-50 shareholders enter a buy-sell option agreement in which either one can offer his shares to the other at a fixed price and, if the offer is declined, the corporation is voluntarily dissolved. One of them later offers his shares. The other declines. Sounds like simple plan to avoid a messy court battle, right? Not quite, as you’ll find out in this week’s New York Business Divorce discussing a recent decision by Justice Ira Warshawsky.
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Continue Reading Court Grants Dissolution, Rejects Claim that Failed Buy-Sell Agreement Was “Ploy” by Petitioner to Take Over Corporation’s Retail Store Lease for His New Business

There is nothing “unique” or “even unusual” about deadlock dissolution cases that place them outside the scope of a broad arbitration clause in a shareholders’ agreement, rules Justice Ira Warshawsky in a recent decision featured in this week’s New York Business Divorce.
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Continue Reading No Exception to Arbitration for Deadlock Dissolution Petition, Court Rules

If you’re going to accuse your business partner of bad acts and ask for judicial dissolution of the business, be prepared to settle or take the case all the way to trial. That seems to be the message given to the petitioner in a recent case highlighted in this week’s New York Business Divorce, when the court turned down her request to withdraw the case “without prejudice.”
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Continue Reading Court Rejects Bid by Corporate Dissolution Petitioner to Voluntarily Withdraw Case Without Prejudice