News & Analysis as of

Appeals Business Divorce

Farrell Fritz, P.C.

A Tardy Plaintiff’s Best Friend: The Open Repudiation Doctrine

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Pre-answer motions to dismiss for untimeliness are exceptionally common in business divorce litigation. Statute of limitations analysis can be deceptively simple in theory, but elusively difficult in practice, even for...more

Stradling Yocca Carlson & Rauth

California Business Divorce: California Court Recognizes LLC Member Lists as Trade Secrets in Recent Ruling

California Court Recognizes LLC Member Lists as Trade Secrets in Recent Ruling - When an LLC member suspects the company is playing favorites with redemption requests, how much access should they have to the membership rolls...more

Farrell Fritz, P.C.

A Message of Acceptance from the Garden State

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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

Farrell Fritz, P.C.

Demand Futility, Dissolution, and Transfer Restrictions: Spring Blooms Fresh Developments in LLC Litigation

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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

Farrell Fritz, P.C.

LLC Member States Direct Claims Arising from Machiavellian Manager’s Tactical Bankruptcy Petition

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“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

Farrell Fritz, P.C.

No Unforced Errors Please: “For Cause” Removal Provisions Mean What They Say and Say What They Mean

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Not long ago, we wrote about the vital need for strict compliance with contractual options to buy or sell closely-held business equity interests. As we noted then, failure to strictly comply with any contractual conditions...more

Farrell Fritz, P.C.

Anti-Dissolution Provisions and Public Policy

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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

Farrell Fritz, P.C.

General Partner’s Resignation Triggers Nonjudicial Dissolution of Limited Partnership

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A limited partnership without a general partner cannot lawfully continue. That’s why it’s critical that the limited partnership agreement thoughtfully address general partner succession and, when triggered, the agreement’s...more

Winstead PC

Partnership Agreement Was Invalid Where IT Was Entered Into Between A Fiduciary And Principal And Was Otherwise Unfair And The...

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In Adam v. Marcos, an attorney and his client agreed to a joint venture/partnership. No. 14-18-00450-CV, 2021 Tex. App. LEXIS 2060 (Tex. App.—Houston March 18, 2021, no pet. history). The attorney sued the client for...more

Winstead PC

Business Divorce: Court Affirms Denial Of SLAPP Motion Regarding Partnership Divorce Suit

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In TSA-Tex. Surgical Assocs., L.L.P. v. Vargas, one partner sued his other partners for various claims regarding the defendants attempt to squeeze the plaintiff out of the partnership. No. 14-19-00135-CV, 2021 Tex. App. LEXIS...more

Winstead PC

Court Found That There Was A Fact Question On Whether Officers Violated Fiduciary Duties By Obtaining A Side Bonus From A...

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A business divorce may mean that the owners need to sell the business or the business’s assets. In the following case, some of the owners/officers took advantage of a sale transaction to benefit from that transaction at the...more

Farrell Fritz, P.C.

Winter Case Notes: Time-Barred Dissolution Petition and Other Decisions of Interest

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Welcome to this year’s edition of Winter Case Notes in which I highlight a collection of recent court decisions of interest to business divorce aficionados by way of brief synopses with links to the decisions for those who...more

Farrell Fritz, P.C.

Bending the Rules of Standing: The De Facto Merger Doctrine

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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

Farrell Fritz, P.C.

LLC Survives Member’s Death. Dissolution Petition Doesn’t.

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In 2018, two members of a realty holding LLC sought judicial dissolution based on the death of one of the other members. The operating agreement defines a member’s death as an event of “Dissociation.”...more

Farrell Fritz, P.C.

Operating Agreement Spawns Multiple Disputes Between 50/50 Members of Realty Holding LLC

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330 West 85th Street is a prime location on Manhattan’s Upper West Side. At that address sits an elegant, pre-war, 48-unit rental apartment building known as The Rexmere. A 4th floor one-bedroom apartment currently is...more

Farrell Fritz, P.C.

Pave Paradise, Put Up a Purposeful Parking Lot

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Parking lots breed partnership disputes. I’ve litigated them and I’ve written about them, most notably the Kassab saga. I suppose it’s the untapped development potential of parking lots, especially in flourishing downtown...more

Farrell Fritz, P.C.

Can an Arbitrator Order Extra-Judicial Dissolution?

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Often business owners enter into arbitration agreements because they hope it will result in a speedier, less expensive resolution than litigation to disputes with their co-owners. ...more

Farrell Fritz, P.C.

A Pig in a Poke: The Rollercoaster Kadosh Settlement Litigation

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Years ago, we wrote about the perils of “impromptu” settlements in business divorce cases – settlements eked out at the courthouse, on the fly, under pressure, during conferences, hearings, or trials. The resulting agreements...more

Farrell Fritz, P.C.

Top Ten Business Divorce Cases of 2018

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I’m very pleased to present my 11th annual list of this past year’s ten most significant business divorce cases. This year’s list includes four important appellate decisions, including one likely to stand as a landmark...more

Farrell Fritz, P.C.

When Dealing in Partnership Owned Real Property, Caveat Emptor

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A basic and well-known principle of partnership law is that, absent an agreement to the contrary, general partners have authority to unilaterally bind the partnership to contracts with third parties....more

Farrell Fritz, P.C.

Dead Men Tell No Tales of Shareholder Buy-Outs Gone Sour

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When three gentlemen in their mid-eighties, one of whom is in a nursing home with failing health and onset dementia, are the key players in a disputed shareholder buy-out transaction, what are the odds they’ll all be around...more

Farrell Fritz, P.C.

Bona Fide Purchaser Avoids Rescission of Minority Shareholder’s Unauthorized Sale of Corporation’s Realty

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The Lowbet Realty saga, featuring the dissolution court’s rarely used authority to rescind an unauthorized sale of the corporation’s realty under Business Corporation Law § 1114, has finally ended after six years with a...more

Farrell Fritz, P.C.

Corporate Frankenstein “Partnership to Form a Corporation” Lives Another Day

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Lawyers are famous for arguing seemingly inconsistent positions at the same time. We practitioners lovingly refer to the technique as “arguing in the alternative.” The famous Texas trial lawyer, Richard “Racehorse” Haynes,...more

Farrell Fritz, P.C.

Top 10 Business Divorce Cases of 2017

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I’m delighted to present my 10th annual list of this past year’s ten most significant business divorce cases. This year’s list includes seven noteworthy appellate decisions, two of which — Mace v Tunick and Shapiro v...more

Farrell Fritz, P.C.

A River’s Divide: Time for the Manhattan and Brooklyn Appellate Courts to Agree on Marketability Discount in Fair Value...

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The East River and roughly five miles as the pigeon flies separate the equally beautiful courthouses of the Appellate Division, Second Department in Brooklyn and the Appellate Division, First Department in Manhattan. Because...more

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