A recent decision from one of our favorites, Albany County Commercial Division Justice Richard M. Platkin, is a reminder to would-be assignees of limited partnership interests that without total compliance with the terms and...more
This week’s New York Business Divorce takes us to the Garden State for a delightfully-written, post-trial decision by retired, recalled Appellate Division Judge Clarkson S. Fisher, Jr....more
We’ve written about accountant liability. We’ve written about bookkeeper liability. A carefully crafted complaint can state viable claims for either. But business appraiser liability?...more
New York’s appellate courts are breaking new ground in 2025.
Until a month ago, I would have said that “deadlock” most certainly is not enough on its own to dissolve a New York LLC....more
To prevail on a cause of action in a business divorce lawsuit, the plaintiff has many essential boxes to check. Pleading requirements vary from one claim to another, but all business divorce cases have one thing in common....more
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
Is a limited liability company a party to and bound by its own operating agreement?
Many folks would say, “Yes, of course.” But it turns out the answer varies depending upon the law of the company’s state of...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
5/17/2024
/ Board Members ,
Breach of Duty ,
Business Entities ,
Business Litigation ,
Business Ownership ,
Corporate Governance ,
Derivative Suit ,
Dispute Resolution ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Partnerships ,
Shareholders
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
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
There are many paths to a fair value appraisal proceeding. A road less traveled begins at Section 910 of the Business Corporation Law (the “BCL”).
...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
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
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
In last week’s New York Business Divorce, we wrote about an important decision from New York’s highest court, Sage Sys., Inc. v Liss (___ NY3d ___, 2022 NY Slip Op 05918 [Ct App Oct. 20, 2022]). In Sage, the Court of Appeals...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
A rarely litigated provision of the New York Limited Liability Company Law (the “LLC Law”), Section 1006, authorizes the conversion of a general or limited partnership to a New York LLC through a statutorily-prescribed...more
You know you’re in big trouble if the post-trial decision in a lawsuit you filed begins like this:
“The court finds the plaintiff, Rowen Seibel, not credible. This is primarily because it appears he fabricated evidence...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
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
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
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
Most folks associate beer with pleasure. Many craft brewers will tell you they went into business for that reason: to make themselves and others happy (and, oh yeah, make money). ...more
9/13/2021
/ Breach of Contract ,
Breach of Duty ,
Breweries ,
Business Divorce ,
Business Litigation ,
Dilution ,
Freeze-Out Mergers ,
Limited Liability Company (LLC) ,
Membership Interest ,
Motion To Enjoin ,
Operating Agreements ,
Preliminary Injunctions ,
Startups