At least on paper, shotgun provisions in shareholder and operating agreements provide an elegant and efficient buy-out solution when business owners can’t get along and need a divorce. In a two-owner company, the one who...more
It’s true that the statutory and common-law rules at play in business divorce cases can vary widely from state to state. But it’s also true that court decisions in one state can influence courts in other states, and can...more
In this episode, Prof. Peter Molk of the Willamette University College of Law discusses his groundbreaking study and forthcoming law review article on how LLC owners draft their agreements to strengthen or weaken the owner...more
A huge percentage of limited liability companies consist of two co-equal, 50% members, which poses the danger of management deadlock and dysfunction leading to dissolution or other litigation. In this episode, you'll hear my...more
The Chancery Court of Delaware is considered by many to be the most influential U.S. court when it comes to business law, mostly due to that state's dominant role as the preferred state of incorporation of publicly held...more
I can count on one hand the number of federal court cases I’ve featured on this blog since I started it almost 10 years ago — and that’s no coincidence....more
Expulsion a/k/a dissociation of an LLC member is a hot-button topic whether it’s pursuant to the terms of an operating agreement or by court order. This episode of the Business Divorce Roundtable features an interview with...more
Like most civil cases, the vast majority of business divorce disputes get resolved before trial, which is disappointing for us voyeurs since only at trial with live witnesses undergoing cross examination does one get the full...more
3/27/2017
/ Business Ownership ,
Dissolution ,
Estate Claims ,
Family Businesses ,
Foreclosure ,
Limited Liability Company (LLC) ,
Mortgages ,
Partnerships ,
Real Estate Market ,
Transfer of Assets ,
Wills
The combination of majority rule and lack of exit rights leaves minority members of LLCs vulnerable to oppressive conduct by the majority, yet unlike legislation in most states giving dissolution and buy-out remedies to...more
Welcome to another edition of Winter Case Notes in which I clear out my backlog of recent court decisions of interest to business divorce aficionados by way of brief synopses with links to the decisions for those who wish to...more
An appellate decision last week sounds alarm bells for minority members of New York LLCs that have no operating agreement and for anyone considering becoming a minority member of an LLC without first having in place an...more
Oh, the things that can happen when the LLC members identified in the company’s operating agreement differ from those identified in official documents submitted to government agencies....more
Notwithstanding the ascendency of the limited liability company, the Delaware limited partnership continues to serve as an important, tax-advantaged vehicle for certain capital-intensive ventures — especially in the energy...more
1/3/2017
/ Acquisitions ,
Corporate Counsel ,
Covenant of Good Faith and Fair Dealing ,
Damages ,
DE Supreme Court ,
Derivatives ,
Energy Sector ,
Limited Liability Company (LLC) ,
Limited Liability Partnerships ,
Master Limited Partnerships ,
Mergers ,
Pipelines ,
Popular ,
Safe Harbors
I’m pleased to present my 9th annual list of this past year’s ten most significant business divorce cases. The list includes important appellate rulings by the First and Second Departments on dissolution of foreign business...more
12/27/2016
/ Appeals ,
Appraisal ,
Books & Records ,
Breach of Duty ,
Corporate Dissolution ,
Derivative Suit ,
Enabling Laws ,
Fiduciary Duty ,
First Impression ,
Foreign Business Partners ,
Foreign Entities ,
Jurisdiction ,
Limited Liability Company (LLC) ,
LLC Agreements ,
Merger Agreements ,
NJ Supreme Court ,
Partnership Interests ,
Popular ,
Shareholder Rights ,
Shareholders' Agreements ,
Standing
What makes a shareholder a shareholder? What makes an LLC member a member?
The simplicity of the questions belies the difficulties and endlessly unique fact patterns encountered in case after case involving close...more
12/19/2016
/ Breach of Duty ,
Closely Held Businesses ,
Declaratory Judgments ,
Fiduciary Duty ,
Hiring & Firing ,
Judicial Dissolution ,
Likelihood of Success ,
Limited Liability Company (LLC) ,
Members ,
Membership Interest ,
Operating Agreements ,
Preliminary Injunctions ,
Shareholders ,
Standing ,
Stock Purchase Agreement ,
Stock Transfer Restrictions