Who says email is more efficient and cheaper than regular mail? -
Not the manager of the McGuire family real estate business after winning a lower court ruling only to see it reversed on appeal last month in a decision...more
9/20/2021
/ Business Divorce ,
Business Litigation ,
Capital Calls ,
Contract Disputes ,
Contract Terms ,
Email ,
Family Businesses ,
Limited Liability Company (LLC) ,
Membership Interest ,
Notice Requirements ,
Operating Agreements
It’s not surprising that Vice Chancellor Zurn’s recent, first-impression decision in In re Coinmint, LLC, aligning itself with rulings in many other states including New York, found that Delaware courts lack subject matter...more
9/7/2021
/ Acquiescence ,
Bitcoin Mining ,
Business Disputes ,
Business Divorce ,
Corporate Conversions ,
Equitable Defenses ,
Estoppel ,
Foreign Entities ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
Puerto Rico ,
Subject Matter Jurisdiction
Welcome to this 11th annual edition of Summer Shorts! This year’s edition features brief commentary on half a dozen business divorce cases of interest from across the country. ...more
8/30/2021
/ Business Divorce ,
Buyouts ,
Contract Terms ,
Fair Value Standard ,
Family Businesses ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Limited Partnerships ,
Membership Interest ,
Operating Agreements ,
Shareholders
As I wrote here, in 2016 the Manhattan-based Appellate Division, First Department decided Raharney Capital LLC v Capital Stack LLC, overruling its own precedent and joining appellate rulings by the other Departments holding...more
Managing members of manager-managed New York LLCs owe default fiduciary duties of loyalty and care to non-managing members. Those duties can be modified by the operating agreement....more
Iowa was one of the first states to adopt the 2006 Revised Uniform Limited Liability Company Act. As of this year, 21 others have done so not including New York which continues to limp along with its creaky LLC Law enacted...more
Anyone who keeps up with the public equity markets knows that the volume of IPOs generated by Special Purpose Acquisition Companies, better known as SPACs, has exploded over the last two years. ...more
Now that I’ve got your attention, relax. At least for New York LLCs, a member can be expelled from an LLC only if expressly authorized by the operating agreement....more
Of late I’ve been ruminating on New York’s membership in the shrinking pool of states that don’t recognize oppression of an LLC minority member by the controlling members or managers as ground for judicial dissolution....more
4/19/2021
/ Books & Records ,
Breach of Duty ,
Business Divorce ,
Business Litigation ,
Closely Held Businesses ,
Contract Terms ,
Dissolution ,
Fiduciary Duty ,
Judicial Dissolution ,
Limited Liability Company (LLC) ,
Minority Shareholders ,
Operating Agreements ,
Shareholder Distributions ,
Shareholder Oppression
Here in the New York metro area, for the first time in years winter is living up to its name. The snow-plowed streets and sub-freezing temperatures are a natural setting for this sixth annual edition of Winter Case Notes in...more
2/22/2021
/ Breach of Duty ,
Business Divorce ,
Business Litigation ,
Commercial Court ,
Corporate Deadlock ,
Corporate Dissolution ,
Fiduciary Duty ,
Law Firm Partners ,
Limited Liability Company (LLC) ,
Tax Exempt Entities ,
Tax Fraud
It’s not unusual to find buy-out provisions in shareholder and operating agreements that commit the pricing of the buy-out to the “final and binding” determination of one or more appraisers. The same agreements also may...more
2/15/2021
/ Appraisal ,
Arbitration Agreements ,
Arbitration Awards ,
Business Divorce ,
Buy-Out Agreements ,
Closely Held Businesses ,
Contract Terms ,
Fair Market Value ,
Limited Liability Company (LLC) ,
Membership Interest ,
Operating Agreements ,
PricewaterhouseCoopers ,
Repurchase Agreements ,
Shareholders
Three weeks ago, I wrote about the Bak v Rostek case in Brooklyn Supreme Court addressing the duty to disclose third-party offers amidst buy-out negotiations between co-owners. ...more
2/1/2021
/ Aiding and Abetting ,
Breach of Duty ,
Business Divorce ,
Business Litigation ,
Buy-Out Agreements ,
Corporate Sales Transactions ,
Duty to Disclose ,
Fiduciary Duty ,
Fraudulent Inducement ,
Limited Liability Company (LLC) ,
Purchase Agreement ,
Unjust Enrichment
For law bloggers, if there’s one thing more satisfying than writing about an important new court decision, it’s writing about an important new court decision that you won for your client....more
I’m very pleased to present my 13th annual list of the past year’s ten most significant business divorce cases.
This year’s list includes important appellate and trial court decisions in New York and Delaware on a...more
“I don’t get no respect” was a famous Rodney Dangerfield comedy routine. It also could be ascribed albeit less comedically to tiebreakers assigned the often thankless task of resolving deadlock between 50/50 owners or...more
The restaurant business is on the skids amid the COVID-19 pandemic. Yelp reports that 60% of closed restaurants won’t re-open.
Apart from the pandemic, the success rate for new restaurants is dauntingly low. Surveys show a...more
When the management of a closely held business is controlled equally by two owners, it’s wise both to anticipate possible deadlock over major decisions and to provide in the constitutive documents a deadlock breaking...more
Don’t Miss the 2020 LLC Institute Virtual Meeting!
It’s that time of year again, when leading experts and practitioners in the field of closely held business entities gather for the LLC Institute’s spectacular CLE program....more
“The Company is formed for any valid business purpose”
Nine seemingly benign words in the garden-variety operating agreement of a realty holding LLC. Nine words that, as one judge opined under similar circumstances some...more
There’s tremendous diversity from state-to-state when it comes to statutory and judge-made law in business divorce cases. The basic fact patterns one sees in cases from across the country, however, don’t vary nearly as much....more
9/14/2020
/ Business Divorce ,
Business Valuations ,
Buyouts ,
Dissolution ,
Distribution Rules ,
Fair Value Standard ,
Family Businesses ,
Fiduciary Duty ,
Limited Liability Company (LLC) ,
Receivership ,
Shareholders ,
Shareholders' Agreements ,
Stock Transfer
Usually I open my annual Summer Shorts post with some breezy comment about summer vacations, travel, or poolside reading. But this shelter-at-home year we find ourselves living and working in profoundly different...more
Some years ago I had the good fortune to join the ABA Business Law Section’s Committee on LLCs, Partnerships and Unincorporated Entities which, among its other scholarly pursuits in the field of alternative entities,...more
I’ve represented clients on both sides of freeze-out mergers of privately owned business entities, so I’m very familiar with their uses, misuses, potential advantages, and potential disadvantages to both freeze-ors and...more
I don’t know if empirical studies have been done comparing the relative frequency or ratio of disputes and litigation over member status in LLCs versus shareholder status in close corporations. My impression as an avid...more
As regular readers of the blog surely are aware, there are few provisions in an LLC or shareholders agreement more likely to be the focus of dispute than the buy-sell provision. Most times, these disputes expose a flaw in the...more