Shareholder oppression has long been a favorite topic of mine—for good reason. A cornerstone of business divorce litigation, a claim of minority shareholder oppression under BCL 1104-a often invites creative argument over...more
In addition to blooming trees and longer days, spring in New York has ushered in a fresh crop of noteworthy decisions on intra-LLC disputes. Headliners include a boost to members’ rights to compel an accounting courtesy of...more
“There is only going to be one winner here, and it’s not going to be you—give in while there is something still left in it for you,” said one LLC member to the other. With co-owners like that, who needs enemies?...more
One of the first business divorce cases that I participated in as a young litigator was a lengthy arbitration over whether a minority shareholder was oppressed under BCL 1104-a. With those fond memories, evolution of the...more
1/13/2025
/ Arbitration ,
Board of Directors ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Contract Terms ,
Corporate Governance ,
Fiduciary Duty ,
Minority Shareholders ,
Shareholder Litigation ,
Shareholder Oppression ,
Shareholders ,
Summary Judgment
We frequently see a partner’s “fiduciary duties” expressed as the union of the duty of loyalty and the duty of care. The duty of loyalty requires fiduciaries to avoid elevating the interests of any other person or entity...more
November was a whirlwind month for New York LLC litigation. It featured disputes over how to wind up a judicially dissolved LLC, a bitter intra-family emergency indemnification/advancement injunction, and the finale of a...more
The limited liability company is relatively young. Though origin research is always a dubious task, my efforts tell me that the first LLC was created in 1977 in Wyoming, followed by other LLCs in Florida in 1982. The years...more
While there is tremendous diversity from state to state when it comes to statutory and judge-made law in business divorce cases, business valuation principles are—with a few notable exceptions—far more homogenous. So it...more
In the world of business divorce litigation, this summer saw everything but a slowdown. We witnessed (and blogged about) Justice Crane cap a long-running fair value proceeding with helpful guidance on appraisals and...more
“It all started when the distributions stopped.” In my travels as a business divorce litigator, I’ve seen many disputes between LLC co-owners that begin with that message. A minority owner is content to remain a “silent...more
Just a few weeks ago, I commented on a recent uptick in disputes centered on the breakup of professional services firms. In those disputes, we expect that the demands of the legal, accounting, and medical professions draw...more
It’s not every day that New York’s highest court considers a question impacting the business divorce cases that we typically litigate. And even when an interesting business divorce issue does make its way up to Albany, it’s...more
As both a practitioner and a close follower of New York business divorce caselaw, I’ve seen a recent uptick in disputes centered on the breakup of professional services firms and cryptocurrency businesses. Perhaps the crypto...more
One of the best parts of being a business litigator is the frequent opportunity it affords to work with (and against) expert witnesses of all stripes. And perhaps because there are so many ways that a business divorce can...more
One of the best parts of being a business litigator is the frequent opportunity it affords to work with (and against) expert witnesses of all stripes. And perhaps because there are so many ways that a business divorce can...more
There are plenty of advantages to practicing business divorce litigation in New York. The diversity of businesses and clients, complexity of agreements and transactions, and excellence of judges and attorneys make New York,...more
The last time we featured a notable decision on a claim for dissolution of a restaurant-operating LLC was in 2017, with a post by Frank McRoberts titled, “LLC’s Purpose Being Achieved? Business Doing Fine? Good Luck Getting...more
“Under any standard of value, the true economic value of a business enterprise will equal the company’s accounting book value only by coincidence . . .” says the late business valuation expert and author Shannon Pratt. So...more
This first post of 2024 brings the New York Business Divorce Blog into its eighteenth calendar year of weekly commentary on disputes among co-owners of closely held businesses.
This year, let business owners and their...more
One need not peruse the pages of this blog for long to learn that its authors strongly advise against entering into an owners’ agreement that calls on the members to “annually” (or worse, “regularly”) update a critical aspect...more
The books and records demand often is the opening act in business divorce litigation. The relatively low burden that an owner must meet in order to obtain access to a company’s books and records, and the availability of an...more
11/20/2023
/ Books & Records ,
Business Disputes ,
Business Divorce ,
Business Litigation ,
Inspection Rights ,
Limited Liability Company (LLC) ,
Membership Interest ,
Merger Clause ,
Ownership Interest ,
Shareholder Rights ,
Shareholders
The owners’ agreement is the backbone of the closely-held business. In intracompany LLC disputes, few things are more important than what the operating agreement has to say on the subject. As a consequence, the pages of...more
The distinction between direct and derivative claims pervades business divorce litigation. Whether a dissident owner’s claim against his or her co-owners is a direct claim (one that the owner can assert in their individual...more
At the beginning of last year, I wrote a eulogy for the equitable accounting cause of action in business disputes: But What of the Equitable Accounting? The gist was that perhaps due to its potential potency, and certainly...more
The authors of this blog have a special affinity for fair value appraisal proceedings. The narrow hearings—where the sole issue before the court is the fair value of an owner’s interest in a business—require attorneys and...more