In litigation, the term “spoliation” generally refers to loss or destruction of evidence. Spoliation can involve physical evidence, paper documents, or electronic data. Spoliation can be intentional or unintentional. Intentional or not, spoliation can result in harsh consequences. Here at New York Business Divorce, we have never given full treatment to a business divorce decision involving the subject of spoliation, although our colleague, Kathryn Cole, often writes about spoliation at our sister blog, All About eDiscovery.…

My last post on the subject of advancement and indemnification summarized the basic rules by which closely-held business owners, officers, directors, managers, and members may be entitled to use company funds to pay their legal fees. This article considers the flip side of the coin: some common-law and statutory limits on the ability of businesses to advance and indemnify legal fees. At first blush, advancement and indemnification rights may seem broad in business divorce disputes,…

Under the so-called “American Rule,” litigants usually must pay their own lawyer fees. But in business divorce and other private company disputes between business co-owners, there are a variety of ways for individual defendants to have the business assume payment of their legal fees in defense of a lawsuit. How? The answer depends on several factors – what kind of entity; what kind of claim; in what capacity is one being sued. In this article,…

Like business divorce, New York trusts and estates litigation (“T&E”) is a highly specialized niche of the law. T&E litigators have their own universe of substantive law, their own set of procedural rules – the Surrogate’s Court Procedure Act, and their own courts – the Surrogate’s Court. Each and every one of the 62 counties in the State of New York has a Surrogate’s Court. So specialized is New York T&E litigation that, at our firm, we have an entire group of…

Strict procedural rules apply to corporate dissolution proceedings in New York, a difficult truth learned the hard way by a five-time rejected, would-be dissolution petitioner in a recent decision by Bronx County Supreme Court Justice Ruben Franco in Corner Furniture Discount Ctr., Inc. v Sapirstein, 2019 NY Slip Op 32245(U) [Sup Ct Bronx County June 14, 2019]. Four other decisions in a related case compounded the loss, as we shall see below. The Underlying Facts…

Two years ago, we wrote about a bitter rivalry between two brothers, James and Vincent Cortazar, over their ownership and management of a single-asset real estate enterprise, 47th Road LLC, which owned an apartment building in Queens. In our last article, Queens County Justice Timothy J. Dufficy issued an order dissolving the LLC under Section 702 of the Limited Liability Company Law. The Court concluded that the brothers were so badly divided, and the…