Delaware Chancery Court Rulings Address Valuation and Insolvency Disputes The steady flow and scholarly character of Delaware Chancery Court opinions in company valuation contests provide an important resource and learning tool for business divorce practitioners, appraisers, and judges in New York and elsewhere. Over the years, I’ve reported on a number of Chancery Court decisions in statutory fair value cases arising from dissenting shareholder proceedings. View Full Post
Winter Case Notes: LLC Deadlock and Other Recent Decisions of Interest This winter forever will be remembered in the Northeast as the winter of the “bomb cyclone,” which gets credit for the 6º temperature and bone-chilling winds howling outside as I write this. So in its honor, I’m accelerating my annual Winter Case Notes synopses of recent business divorce cases, which normally don’t appear until later in the season. View Full Post
This year’s list includes seven noteworthy appellate decisions, two of which — Mace v Tunick and Shapiro v Ettenson — are poised to have major impact on future operating agreements and business divorce cases involving LLCs. The growing dominance of the LLC as the preferred choice of business entity also is reflected in this year’s list, all but three of which resolve disputes among members of LLCs. View Full Post
A River’s Divide: Time for the Manhattan and Brooklyn Appellate Courts to Agree on Marketability Discount in Fair Value Proceedings 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 of the limited jurisdiction and very selective docket of New York’s highest court known as the Court of Appeals, in the vast majority of cases these two intermediate appellate courts effectively are the courts of last resort for their respective geographic slices of downstate New York. View Full Post
A year ago I wrote a piece called The Elusive Surcharge in Dissolution Proceedings highlighting the rare appearance in the case law of the surcharge provision found in Section 1104-a (d) of the Business Corporation Law. The provision allows a court in dissolution proceedings brought by an “oppressed” minority shareholder to “order stock valuations be adjusted and may provide for a surcharge upon the directors or those in control of the corporation upon a finding of willful or reckless dissipation or transfer of assets or corporate property without just or adequate compensation therefor.” If something strikes you amiss, at least as to the provision’s first clause concerning stock valuation, you’re not alone.  View Full Post