In an article from a little over a month ago, we summarized New York’s LLC judicial dissolution statute with the comment, “Breaking up can be hard to do.”...more
Recently, we’ve written two articles focusing on the brewing dispute over whether New York law recognizes a viable cause of action for “common-law” or “equitable” dissolution of a limited liability company....more
Like the Energizer bunny, some business divorce lawsuits keep going and going and going. Years of protracted litigation, brutal though they may be upon the parties, are a bonanza for voyeuristic business divorce practitioners...more
Last week, Peter Mahler blogged about a recent decision holding that a minority shareholder’s claim against its majority co-owners for breach of fiduciary duty in connection with a sale of the business to a third party...more
Ten months ago, we wrote about an unusual case involving an LLC member who documented two irreconcilable membership interest transfers upon death. In Harris v Harris, 2020 NY Slip Op 31570(U) [Sup Ct, NY County Apr. 23,...more
In last week’s New York Business Divorce, Peter Mahler wrote about an important new decision with far-reaching implications for New York LLC owners....more
Five years ago, we wrote about an important decision from the Delaware Chancery Court, In re Carlisle Etcetera, LLC, 114 A3d 592 [2015], in which a court recognized for the first time the existence under Delaware law of a...more
In Jacobs v Cartalemi, now the leading case on the subject of LLC member withdrawal (which our firm had the pleasure of litigating), the Appellate Division – Second Department repeated a well-established principle of law:...more
Oral agreements – and oral modifications of written agreements – are a constant source of litigation in business divorce cases. Alleged oral agreements are subject to attack based upon legal enforceability – as well as their...more
8/24/2020
/ Business Disputes ,
Business Divorce ,
Contract Terms ,
Covered Transactions ,
Limited Liability Company (LLC) ,
Operating Agreements ,
Oral Argument ,
Partnership Agreements ,
Partnerships ,
Shareholders ,
Unenforceable Contract Terms
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
The ongoing coronavirus / COVID-19 pandemic has quite literally impacted everyone and everything in New York, including the courts, which were forced to temporarily cease non-essential functions. The result was a short-lived...more
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
Under the so-called “American Rule,” litigants usually must pay their own lawyer fees. But in business divorce and other private company disputes between business co-owners, there are a variety of ways for individual...more
Two years ago, we wrote about a bitter rivalry between two brothers, James and Vincent Cortazar, over their ownership and management of a single-asset real estate enterprise, 47th Road LLC, which owned an apartment building...more
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
It’s simply in the nature of things that business divorce litigants tend to accuse one another of all manner of heinous, dastardly misdeeds. Phrases like “oppression,” “fraud,” “deceit,” “theft,” “siphoning” of assets,...more
Earlier this year, to honor the retirement of former Manhattan Commercial Division Justice Shirley Werner Kornreich, we published a special retrospective of some of her most notable business divorce decisions. ...more
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
Last week, this blog wrote about a decision by Manhattan Commercial Division Justice Saliann Scarpulla in the burgeoning Yu family melee, in that case pitting one brother against the other and their sister over dissolution of...more
...So you, or your client, have found yourself in an appraisal proceeding. The question then becomes: What are the legal rules, principles, and standards that apply in the valuation proceeding itself? That is the subject of...more
8/6/2018
/ Appraisal ,
Appraisal Rights ,
Business Valuations ,
Buyouts ,
Corporate Dissolution ,
Fair Market Value ,
General Corporation Law ,
Limited Liability Company (LLC) ,
Mergers ,
Partnership Agreements ,
Partnerships ,
Shareholders
Last month, seasoned business appraiser Andy Ross of Getty Marcus CPA, P.C., and I made a presentation at the Nassau County Bar Association about appraisal proceedings in business divorce cases. With the subject of business...more
7/9/2018
/ Appraisal ,
Appraisal Rights ,
Business Valuations ,
Buyouts ,
Corporate Dissolution ,
Fair Market Value ,
General Corporation Law ,
Limited Liability Company (LLC) ,
Mergers ,
Partnership Agreements ,
Partnerships ,
Shareholders
In business divorce litigation, petitioners / plaintiffs often want to start the case with a bang. A common tactic is to file a petition / complaint simultaneously with an injunction motion. Often there is a real need for an...more
How can majority business owners legally rid themselves of a problematic minority owner? Not by transferring the business’s assets to another entity for no consideration. ...more
3/19/2018
/ Breach of Duty ,
Business Litigation ,
Corporate Conversions ,
Fiduciary Duty ,
Fraudulent Conveyance ,
Freeze-Out Mergers ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Minority Shareholders ,
Summary Judgment ,
Transfer of Assets
Under the right set of facts, New York courts occasionally find remedies for LLC owners not explicitly authorized in the Limited Liability Company Law (“LLC Law”). Judges have a natural inclination to try to find solutions...more
As LLCs have become the dominant form of closely-held business in New York, cases involving dissolution of partnerships have become more and more rare. Section 63 of the Partnership Law is the statute governing judicial...more