How often do hopeful beneficiaries of a last will and testament expect to receive what they think will be a valuable bequest of a business interest, only to find their joy turn to despair when they discover the bequest...more
Contracts with “prevailing party” provisions offer the tantalizing, coveted prospect of the winner recovering attorneys’ fees from the loser in legal disputes over the contract’s enforcement....more
Buy-sell agreements come in all shapes and sizes. Some are straightforward. Others are outrageously complex, especially purchase price formulas. Some have triggers for death. Others disability. Retirement. Expulsion....more
The lion’s share of cases we write about on New York Business Divorce involve consummated business relationships where the warring parties have clearly chosen the particular entity form governing their relations, whether it...more
Under a common-law doctrine successful litigants love to hate – the “American Rule” – a party to litigation cannot recover its legal fees unless a contract, statute, or court rule expressly authorizes fee-shifting to the...more
Jury trials in business divorce litigation are uncommon. Bifurcated business divorce jury trials are all but nonexistent. But in Aronov v Khavinson (81 Misc3d 1242(A) [Sup Ct, Kings County Feb. 9, 2024]), we encounter the...more
Parallel business divorce proceedings in the same or different courts alleging overlapping or duplicative claims are common.
When it occurs, judges must often determine whether to dispose of one so the other may proceed...more
1/8/2024
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Conversion ,
Corporate Waste ,
CPLR ,
Divorce ,
Fiduciary Duty ,
Gross Negligence ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
NY Supreme Court ,
Property Ownership
Injunctions are an indispensable weapon in the business divorce lawyer’s arsenal. Primarily defensive in nature, temporary restraining orders and preliminary injunctions tend to feature prominently at the outset of business...more
Misappropriation of corporate opportunity is one of our favorite, most frequently blogged topics on New York Business Divorce. A special kind of breach of fiduciary duty, the corporate opportunity doctrine holds that...more
Occasionally, we come across court cases in which the majority owners so egregiously mistreated their minority co-owners that it’s difficult not to write about it — if only as a lesson in what not to do to separate oneself as...more
Imagine devoting years of costly litigation to rescinding a $1 million equity investment in an LLC for fraudulent inducement, prevailing on the merits by clear and convincing evidence after a full trial, but losing anyway...more
Do New York’s Surrogate’s Courts have jurisdiction to compel an accounting related to a non-party limited liability company in which the decedent’s estate has only a minority interest?
...more
8/28/2023
/ Article III ,
Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Closely Held Businesses ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Standing ,
Surrogate's Court ,
Trust Accounting
That was the interesting, infrequently-litigated question addressed in a recent decision by Manhattan Commercial Division Justice Melissa A. Crane.
Simon v FrancInvest, S.A. (2023 NY Slip Op 32422[U] [Sup Ct, NY County...more
Closely-held business owner breakups often defy easy categorization. What seem at first blush to be traditional business divorce cases sometimes end up treading far into other legal practice areas. Other disputes blur...more
Choice-of-law questions in shareholder derivative lawsuits venued in New York courts involving out-of-state or international entities can be confoundingly difficult, even for appeals court judges....more
Occasionally, we come across post-trial decisions with such scathing rebuke of one side that it’s difficult to imagine why the loser ever chose to take the case to trial. O’Mahony v Whiston is a perfect example....more
Litigants assert with growing frequency “faithless servant” claims in business divorce cases. New York’s faithless servant doctrine, and the legal standards governing faithless servant claims, emanate from two ancient...more
Litigated business breakups are often highly intense and emotional for the participants. The intensity and emotion multiply when the litigants are close family members....more
This important question of whether non-manager, minority limited liability company owners owe fiduciary duties continues to bedevil New York litigants and courts.
The prevailing state of the law remains unsettled, with...more
Folks hearing the phrase “business divorce” for the first time tend to focus unconsciously on the word “divorce,” tuning out the word “business.” The irony is that most business divorce cases have nothing to do with...more
A number of lawsuits have percolated through New York’s courts over the past five years between Adam Max, son of world-renowned visual artist Peter Max, and Adam’s sister, Libra, over control and management of the family...more
5/23/2022
/ Breach of Duty ,
Business Disputes ,
Business Divorce ,
Business Judgment Rule ,
Derivative Suit ,
Exculpatory Clauses ,
Family Businesses ,
Fiduciary Duty ,
Fine Art ,
Hostile Takeover ,
Negligence ,
Personal Liability
It’s hard not to feel sorry for the petitioner in Fernandes v Matrix Model Staffing, Inc., Decision and Order, Index No. 160294/2021 [Sup Ct, NY County Apr. 20, 2022].
In Fernandes, Manhattan Supreme Court Justice Frank...more
Justice Masley’s valuation decision in Quattro Parent LLC v Rakib, 2022 NY Slip Op 30190(U) [Sup Ct, NY County Jan. 14, 2022] is noteworthy for two reasons.
First, it is an extraordinarily rare example of a business...more
Generally speaking, New York courts respect the corporate form, regarding the liabilities of the entity as separate from and inapplicable to the entity’s principals. Under this principle, a plaintiff may litigate a difficult...more
The harried realities of modern life are such that business entity organizational documents, like LLC operating agreements, sometimes do not get drafted or executed until long after the entity’s initial formation with the...more