Franklin C. McRoberts

Firm/Organization: Farrell Fritz, P.C.

Blogs: New York Business Divorce

Latest Articles

New York Business Divorce

Sue for Dissolution – Get Sued for Defamation?

By Franklin C. McRoberts

February 19, 2019

It’s simply in the nature of things that business divorce litigants tend to accuse one another of all manner of heinous, dastardly misdeeds. Phrases like “oppression,” “fraud,” “deceit,” “theft,” “siphoning” of assets, “diversion” of opportunities, etc., are the norm. As a litigant, if you make those kinds of allegations, and they turn out to be unsuccessful, or you withdraw them, can you be sued for defamation? Staten Island Supreme Court Justice Wayne M. Ozzi considered that question in Seneca v Cangro, 2018 …

New York Business Divorce

A Fresh Take on an Old Doctrine – The “Adequate, Alternative Remedy” to Dissolution

By Franklin C. McRoberts

January 22, 2019

After 35 years, Matter of Kemp & Beatley, Inc. (64 NY2d 63 [1984]), remains the leading authority in New York on oppression-based corporate dissolution. In Kemp & Beatley, the Court of Appeals announced a now-venerable legal rule: “Assuming the petitioner has set forth a prima facie case of oppressive conduct,” a shareholder wishing to “forestall dissolution” must “demonstrate to the court the existence of an adequate, alternative remedy.” In practice, what this means is that courts must consider whether…

New York Business Divorce

A Fond Adieu to Two Giants of the Manhattan Commercial Division Bench

By Franklin C. McRoberts

December 24, 2018

Earlier this year, to honor the retirement of former Manhattan Commercial Division Justice Shirley Werner Kornreich, we published a special retrospective of some of her most notable business divorce decisions. This month, two of her former colleagues, Manhattan Commercial Division Justices Eileen Bransten and Charles E. Ramos, are themselves retiring. Justice Bransten concludes 25 years a jurist; Justice Ramos, 35 years on the bench. With the departure of these two judicial titans, we here at…

New York Business Divorce

When Dealing in Partnership Owned Real Property, Caveat Emptor

By Franklin C. McRoberts

November 26, 2018

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. In New York, the rule is codified in Section 20 (1) of the Partnership Law, which states: Every partner is an agent of the partnership for the purpose of its business, and the act of every partner, including the execution in the partnership name of any instrument,…

New York Business Divorce

Accounting Unchained: Is the Closely Held Business Owner’s Right to an Accounting Absolute?

By Franklin C. McRoberts

October 29, 2018

Let’s face it. In business divorce, the accounting cause of action doesn’t get a lot of love. It’s not as sexy as the torts (conversion, breach of fiduciary duty, waste, etc). It lacks the oomph of judicial dissolution. Nonetheless, accounting claims are ubiquitous in business divorce litigation, pleaded practically as a matter of course. Sometimes the claim is tacked on as if by rote, perhaps simply to beef up a petition, complaint, or counter complaint. But other times, like the books …

New York Business Divorce

Stock Pledge Agreement Defeats Minority Shareholder’s Standing to Sue for Statutory But Not Common-Law Dissolution

By Franklin C. McRoberts

October 1, 2018

Last week, this blog wrote about a decision by Manhattan Commercial Division Justice Saliann Scarpulla in the burgeoning Yu family melee, in that case pitting one brother against the other and their sister over dissolution of two single-asset real estate holding LLCs. In her decision, Justice Scarpulla denied dissolution of the LLCs, despite the plaintiff’s allegations that his brother and sister had a personal “vendetta” against him, which they carried out by amending the operating agreement to remove the plaintiff as a manager, authorizing a…

New York Business Divorce

Basics of Valuation Proceedings – Litigating an Appraisal from Start to Finish – Part 3

By Franklin C. McRoberts

September 3, 2018

This is the final installment of a three-part series about the basics of contested New York business appraisal proceedings. The first post addresses the various ways in which business owners can steer a dispute into an appraisal proceeding. The second post addresses the legal rules and principles that apply in appraisal proceedings. This final post addresses the appraisal methodologies and principles that apply in valuation proceedings. Without further ado, let’s talk accounting. Valuation Date The date on…

New York Business Divorce

Basics of Valuation Proceedings – Litigating an Appraisal from Start to Finish – Part 2

By Franklin C. McRoberts

August 6, 2018

A few weeks ago, this blog – in the first of a three-part series about business valuation proceedings – addressed the various statutory triggers by which owners of New York partnerships, corporations, and limited liability companies can wind up in a contested business appraisal proceeding. So you, or your client, have found yourself in an appraisal proceeding. The question then becomes: What are the legal rules, principles, and standards that apply in the valuation proceeding itself? That is the subject of today’s article.…

New York Business Divorce

Basics of Valuation Proceedings – Litigating an Appraisal from Start to Finish – Part 1

By Franklin C. McRoberts

July 9, 2018

Last month, seasoned business appraiser Andy Ross of Getty Marcus CPA, P.C., and I made a presentation at the Nassau County Bar Association about appraisal proceedings in business divorce cases. With the subject of business valuations front of mind, this article – the first in a three-part series – is a treetops summary of the rules governing how business owners may wind up in an appraisal proceeding. Later articles will address the legal and accounting principles that apply in the valuation proceedings. But before we get started, some…

New York Business Divorce

A Trip Down Business Divorce Lane with Recently Retired Justice Shirley Werner Kornreich

By Franklin C. McRoberts

June 11, 2018

With a genuine sense of loss, we bid adieu to Manhattan Commercial Division Justice Shirley Werner Kornreich, who retired at the end of May after more than three decades of service on the bench, including nearly ten years as a Justice of the Commercial Division. Her accomplishments are many and varied. She is a detailed and scholarly writer. She ran an orderly and efficient part. Invariably well prepared, she asked probing questions at oral argument, arriving quickly at the “nub”…

Franklin C. McRoberts

Sue for Dissolution – Get Sued for Defamation?

A Fresh Take on an Old Doctrine – The “Adequate, Alternative Remedy” to Dissolution

A Fond Adieu to Two Giants of the Manhattan Commercial Division Bench

When Dealing in Partnership Owned Real Property, Caveat Emptor

Accounting Unchained: Is the Closely Held Business Owner’s Right to an Accounting Absolute?

Stock Pledge Agreement Defeats Minority Shareholder’s Standing to Sue for Statutory But Not Common-Law Dissolution

Basics of Valuation Proceedings – Litigating an Appraisal from Start to Finish – Part 3

Basics of Valuation Proceedings – Litigating an Appraisal from Start to Finish – Part 2

Basics of Valuation Proceedings – Litigating an Appraisal from Start to Finish – Part 1

A Trip Down Business Divorce Lane with Recently Retired Justice Shirley Werner Kornreich

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