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Farrell Fritz, P.C.

On Camera: My Recent Video Interview on, What Else, Business Divorce (Part One)

Farrell Fritz, P.C. on

I recently had the pleasure of being interviewed by Sandra Schulte at the media production studios of the Manhattan Neighborhood Network located near the Javits Center. Sandra, whom I met at a CLE program where I was a...more

ArentFox Schiff

How Boilerplate Agreement Advancement Clauses Can Transform Ownership Disputes

ArentFox Schiff on

Indemnification and advancement clauses are often seen as mere boilerplate language in a company’s governing documents, routinely copied from one form agreement to another. However, advancement clauses may be important...more

Nossaman LLP

Corporate Divorce – Preventing and Managing the Break-Up of a Business Partnership

Nossaman LLP on

In this episode, Kimberly Kamkar is joined by corporate law partners Patrick Richard, Anna Tang and Doug Schwartz to explore the complexities of business "break-ups." They discuss essential practices for future planning, the...more

Farrell Fritz, P.C.

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

Farrell Fritz, P.C. on

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.

And the Award for Most Creative Attempt to Evade a Book Value Buy-Sell Provision Goes To . . .

Farrell Fritz, P.C. on

“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

Farrell Fritz, P.C.

Enforcing the Guardrails on Transactions Involving Interested Directors of Close Corporations

Farrell Fritz, P.C. on

In my business divorce practice I deal with many closely held corporations that have only a few or perhaps just two shareholders, each of whom is actively involved in running the business. Within that category are many...more

Farrell Fritz, P.C.

Direct to Beneficial: Change of Corporate Ownership Structure Yields No Right to Dissent and Seek Appraisal

Farrell Fritz, P.C. on

There are many paths to a fair value appraisal proceeding. A road less traveled begins at Section 910 of the Business Corporation Law (the “BCL”). ...more

Farrell Fritz, P.C.

Winter Case Notes: Murder, Forgery, Accidental Death, Oppression, Oh My!

Farrell Fritz, P.C. on

Welcome to this year’s Winter Case Notes where, amidst the arctic blast currently sweeping most of the nation, I offer shortish takes on several court decisions in recent business divorce cases. This year’s edition...more

Farrell Fritz, P.C.

Top 10 Business Divorce Cases of 2023

Farrell Fritz, P.C. on

Some years are easier than others to select the most significant business divorce cases. In this, the 16th year I’ve published this top-10 list, the task is made especially difficult by a veritable flood of court decisions...more

Farrell Fritz, P.C.

Proceed with Caution: Strategy Considerations Before Making a Books and Records Demand

Farrell Fritz, P.C. on

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

Farrell Fritz, P.C.

The Magnolia State Wins the Prize for Novel Alternative Remedies in LLC Dissolution Cases

Farrell Fritz, P.C. on

New York courts are not in the vanguard when it comes to devising less drastic, alternative remedies in LLC judicial dissolution cases. In their defense, there’s nothing in Article 7 of New York’s LLC Law that expressly...more

Farrell Fritz, P.C.

Can a Shareholder Suing Derivatively Face Countersuit Individually?

Farrell Fritz, P.C. on

That was the interesting, infrequently-litigated question addressed in a recent decision by Manhattan Commercial Division Justice Melissa A. Crane. Simon v FrancInvest, S.A. (2023 NY Slip Op 32422[U] [Sup Ct, NY County...more

Farrell Fritz, P.C.

At-Will Employment Agreement Plus Mandatory Redemption Clause Leaves Minority Shareholder-Employees Out in the Cold

Farrell Fritz, P.C. on

MiniCorp has five shareholders, all of whom are employees.  Each shareholder’s employment agreement states that they are an at-will employee of MiniCorp, and the shareholders agreement provides that when a shareholder’s...more

Farrell Fritz, P.C.

Can One 50% Shareholder Sue the Other in the Company Name on the Company Dollar? Answer: It Depends

Farrell Fritz, P.C. on

In the menagerie of closely held companies, those owned and controlled by 50/50 business partners pose unique benefits and challenges. On the benefit side, co-equal ownership and control can foster cooperation,...more

Marshall Dennehey

Superior Court: Yes, We Actually Mean Actual Authority for an Actual Settlement of a Civil Case

Marshall Dennehey on

Driscoll and King were partners in a venture operating a restaurant. Their relationship soured, and so as not to sour matters for their customers, they sought to separate amicably. The deal was to be that King would buy out...more

Farrell Fritz, P.C.

Derivative Standing and the Internal Affairs Doctrine

Farrell Fritz, P.C. on

Choice-of-law questions in shareholder derivative lawsuits venued in New York courts involving out-of-state or international entities can be confoundingly difficult, even for appeals court judges....more

Farrell Fritz, P.C.

Misappropriated Watering Hole Becomes Money Judgment Sinkhole

Farrell Fritz, P.C. on

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

Robson & Robson, P.C.

Without Equal? Pennsylvania Federal Court Charts New Path, Rules Fiduciary Duty Exists Between 50/50 Co-owners Of A Business

Robson & Robson, P.C. on

There is arguably no more prevalent legal claim in business divorces than a claim of breach of a fiduciary duty. Simply put (and I do mean simply), when one person owes a fiduciary duty to another, the person with the duty...more

Farrell Fritz, P.C.

First Department Recognizes Cause of Action for Specific Performance of LLC Member Voting Agreement

Farrell Fritz, P.C. on

In 1941, two of the three shareholders of Ringling Bros.-Barnum & Bailey Combined Shows, Inc. entered into an agreement stating that they would vote their combined 630 of the outstanding 1000 shares of Ringling Bros. stock...more

Farrell Fritz, P.C.

When Do Disguised Dividends Add Up to Minority Shareholder Oppression?

Farrell Fritz, P.C. on

De facto dividend. Disguised dividend. Constructive dividend. They all refer to the same thing: monies in excess of reasonable compensation taken by owners of closely held companies, booked as deductible employment...more

Farrell Fritz, P.C.

The Worst of Both Worlds: Untimely Buyout Election Yields Full Merits Hearing and Huge Bond

Farrell Fritz, P.C. on

Nine months ago, we wrote about a 20% shareholder, Alvin Clayton Fernandes, whose bare bones petition Manhattan Supreme Court Justice Frank P. Nervo found stated sufficient grounds to judicially dissolve a seemingly...more

Robson & Robson, P.C.

Ain’t Nothing Like The Real Thing

Robson & Robson, P.C. on

In Pennsylvania, Manufactured Deadlocks are Unlikely to Trigger Judicial Dissolution - In disputes among the owners of a closely held company, involuntary judicial dissolution is the nuclear option....more

Farrell Fritz, P.C.

Dueling Dissolution Petitions Beget Dissolution Without Consideration of Alternate Remedies

Farrell Fritz, P.C. on

This blog frequently covers cases considering a shareholder’s request to dissolve a corporation under New York’s oppression-based corporate dissolution statute, BCL 1104-a.  That statute allows a shareholder to petition for...more

Farrell Fritz, P.C.

The “Conflict of Interest” Defense to Shareholder Derivative Standing

Farrell Fritz, P.C. on

In shareholder derivative litigation, defendants occasionally argue that the plaintiff – who ostensibly sues on behalf of the company and its owners in a fiduciary capacity – has some form of conflict of interest with the...more

Farrell Fritz, P.C.

Business Divorce, Brooklyn Style

Farrell Fritz, P.C. on

The pictured architectural rendering of the sunlit Kings County Supreme Courthouse at 360 Adams Street, completed in 1957, doesn’t quite capture the reality of its dour, hulking presence in downtown Brooklyn. Its design...more

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