As is my custom, I devote a post on this blog to each new episode of my Business Divorce Roundtable podcast. Episode 20, featuring Part Two of my interview of Professor Peter Molk on the topic of LLCs, is now available and can be heard by clicking on the link at the bottom of this post. If you haven’t already listened to Part One, I highly recommend you do so before listening to Part Two. This link…

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.…

After three decades during which it rose from obscurity to become the entity of choice, the limited liability company remains an experiment in progress. This is especially true when it comes to the internal relations of LLC members and managers, caught in the cross currents of the LLC’s freedom-of-contract foundation, oftentimes fuzzy statutory default rules, and the courts’ resort to traditional powers of equity to resolve the particular disputes that come before them. In my experience advising LLC owners, litigating their disputes with co-owners, and keeping up…

In the end, it wasn’t much of a fight. The case of Huggins v Scott, decided last month by Justice W. Franc Perry of the Manhattan Supreme Court, illustrates anew the well-nigh insurmountable hurdle faced by a minority member seeking judicial dissolution of an economically viable LLC carrying on its business in conformity with its intended purpose. The case tells the story of two longtime friends who became romantically involved and then became business partners before both relationships fizzled.…

I’ve lost track of how many lawsuits I’ve seen between co-owners of New York City restaurants. It’s not surprising given the high percentage of restaurant failures in an intensely competitive market with high rents, high labor costs, and high everything else. Another significant factor is the heavy initial investment required for start-up restaurants in the city. Aspiring restaurant entrepreneurs long on ideas and talent but short on cash and credit often will bring in friends and family as silent partners to provide the capital…

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,…