Almost exactly one year ago, we wrote about the go-to line of New York case law for business divorce litigants hoping to secure injunctions: a substantial and ever growing body of authority holding that involuntary loss or...more
Closely-held business entities come in all shapes and sizes. By definition, under Partnership Law § 10, it takes “two or more” owners to form a general partnership. But corporations and LLCs have no such impediment, ranging...more
Does the outside accountant of a closely-held business and its individual owners owe a legal duty to disclose to one owner the suspected financial improprieties of another? ...more
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
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
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
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
The universe works in mysterious ways. Four days ago, when I sat down to write this article, my plan was to feature a decision from Manhattan Commercial Division Justice Andrea J. Masley denying dismissal of a closely-held...more
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
In Congel v Malfitano, New York’s highest court wrote that business partners are free to include in partnership contracts practically “any agreement they wish,” including about “the means by which a partnership will dissolve,...more
3/14/2022
/ Appeals ,
Business Divorce ,
Closely Held Businesses ,
Contract Disputes ,
Contract Terms ,
Delaware General Corporation Law ,
Dissolution ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Partnership Agreements ,
Public Policy
Two years ago, Peter Mahler wrote about a dissolution lawsuit by a female minority shareholder alleging that her male co-shareholders condoned a pattern of sexually offensive and demeaning conduct by a senior co-worker, which...more
11/29/2021
/ #MeToo ,
Breach of Duty ,
Business Divorce ,
Business Judgment Rule ,
Business Litigation ,
Closely Held Businesses ,
Corporate Culture ,
Corporate Waste ,
Derivative Complaint ,
Dissolution ,
Fiduciary Duty ,
Harassment ,
Sexual Harassment ,
Shareholder Oppression ,
Summary Judgment
Ownership status in a closely-held business is the first and most vital box almost every business divorce petitioner must check....more
10/11/2021
/ Business Divorce ,
Business Litigation ,
Business Ownership ,
Closely Held Businesses ,
Dissolution ,
Estoppel ,
Evidence ,
Family Businesses ,
Limited Liability Company (LLC) ,
Litigation Strategies ,
Partnerships ,
Proof of Ownership ,
Tax Returns ,
Trial Preparation
Many business divorce practitioners are familiar with a phenomenon one might call “petitioner’s remorse” – an often abrupt abandonment of one’s desire to dissolve a closely-held business entity when the opposing party...more
Corporate shareholder and LLC operating agreements routinely contain provisions addressing the transfer of equity interests upon the death of an owner of a closely-held business. Such provisions are vital for succession...more
6/8/2020
/ Business Continuity Plans ,
Business Divorce ,
Business Litigation ,
Business Succession ,
Closely Held Businesses ,
Contract Terms ,
Decedent Protection ,
Equity ,
Estate Planning ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Ownership Interest ,
Probate
Business Divorce 101: To be entitled to an accounting of a closely-held business, the plaintiff or petitioner must demonstrate the existence of a fiduciary relationship giving rise to a duty to account....more
2/18/2020
/ Appeals ,
Business Divorce ,
Business Litigation ,
Closely Held Businesses ,
Commercial Court ,
Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Pro Rata Allocation Rule ,
Shareholder Distributions ,
Standing
Over the years, we’ve written a lot about limited partnership, corporation, and LLC “fair value” appraisal proceedings....more
5/13/2019
/ Appraisal ,
Business Divorce ,
Business Valuations ,
Buyouts ,
Closely Held Businesses ,
Deadlines ,
Dissenters Rights ,
Fair Value Standard ,
Freeze-Out Mergers ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Triggering Event
Let’s face it. In business divorce, the accounting cause of action doesn’t get a lot of love. It’s not as sexy as the torts (conversion, breach of fiduciary duty, waste, etc). It lacks the oomph of judicial dissolution....more