News & Analysis as of

Business Divorce Summary Judgment

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.

Can a Shareholder Be Oppressed After Ceding Control? Oppression, Reasonable Expectations, and Contractual Formalism

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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

Farrell Fritz, P.C.

Misappropriated Watering Hole Becomes Money Judgment Sinkhole

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Occasionally, we come across post-trial decisions with such scathing rebuke of one side that it’s difficult to imagine why the loser ever chose to take the case to trial. O’Mahony v Whiston is a perfect example....more

Farrell Fritz, P.C.

Summary Judgment in Lieu of Complaint Meets Business Divorce

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For most business divorce litigants, a dispositive win on the merits, even in a summary proceeding, can take years. Appraisal proceedings following a cash-out merger, for example, may involve multiple years of difficult...more

Farrell Fritz, P.C.

Equitable Standing in Shareholder Derivative Suit Bows to the Contemporaneous Ownership Rule

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In 2008, Vice Chancellor J. Travis Laster of the Delaware Court of Chancery — one of the many intellectual giants and gifted writers who’ve occupied seats on that bench — published an article in the Delaware Journal of...more

Farrell Fritz, P.C.

Valuation Decision Finds LLC “Worthless, Worthless, Worthless”

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Justice Masley’s valuation decision in Quattro Parent LLC v Rakib, 2022 NY Slip Op 30190(U) [Sup Ct, NY County Jan. 14, 2022] is noteworthy for two reasons. First, it is an extraordinarily rare example of a business...more

Farrell Fritz, P.C.

#MeToo and Business Divorce: The Flip Side

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Two years ago, Peter Mahler wrote about a dissolution lawsuit by a female minority shareholder alleging that her male co-shareholders condoned a pattern of sexually offensive and demeaning conduct by a senior co-worker, which...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

Winstead PC

Business Divorce: Court Held That Parties Did Not Form A Partnership Where Certain Express Conditions Precedent Were Not Met

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Parties often begin a business together without thinking through all of the legal details that define their rights. When they eventually divorce, they need to resort to the language in agreements that they entered into and...more

Farrell Fritz, P.C.

Past is Prologue: Refusal to Adopt Dividend Policy After Petitioner Resigns Not Ground for Dissolution

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In the judicial dissolution case that John (“Jake”) Feldmeier brought after resigning as the highly paid president of the family-owned business, the central issue over which he and his opposing siblings fought was whether the...more

Farrell Fritz, P.C.

Court cannot search the record on claims not the subject of the motion, or can it?

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The Appellate Division, in a short but direct ruling, reminds the bench and bar that courts cannot simply “search the record” and grant summary judgment on claims or defenses that are not the subject of the motion. It did so...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.

Rare Partnership Dissolution Decision Applies Deadlock Standard to Dissolution Under Partnership Law

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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

Farrell Fritz, P.C.

“Where’s the Beef?” Says Appeals Court, Reversing LLC Dissolution

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A dissolution petitioner received the judicial equivalent of the old quip “Where’s the beef?” in a Brooklyn appeals court decision last week reversing an order dissolving a limited liability company under Section 702 of the...more

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