New York Business Divorce

Commentary on Dissolution and Other Disputes Among Co-Owners of Closely Held Business Entities

Latest from New York Business Divorce

Notwithstanding we’ve had no more than a dusting of snow thus far in my downstate New York neck of the woods, welcome to another edition of Winter Case Notes in which I visit my backlog of recent court decisions of interest to business divorce aficionados by way of brief synopses with links to the decisions for those who wish to dig deeper. This year’s synopses feature cases involving minority shareholder oppression claims in a father-daughter dispute previously reported on this blog; an appellate decision affirming the…
DRAFTING ERRORS, ANYONE? A MESSAGE FROM PROFESSOR KLEINBERGER At the Spring meeting of the ABA Business Law Section in Vancouver, on Thursday, March 28, 2019 from 2:30pm – 4:30pm, the Committee on Limited Liability Companies, Partnerships, and Unincorporated Entities is sponsoring a panel entitled, “Lessons from the Trenches for Transactional Lawyers.”  Here is a brief description: Avoiding errors in transactional documents — insights from attorneys who have seen errors play out in litigation:  two litigators…
In the last two years, fueled by a series of high profile cases involving media executives, entertainers, and other public figures, #MeToo has gained worldwide recognition as a symbol of the burgeoning movement against sexual harassment and assault, especially in the workplace. In our country, we have federal, state, and local statutes designed to protect employees against gender discrimination including sexual harassment and hostile workplace environment. Such laws generally do not extend protection to owners…
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…
As if we need another case illustrating why fixed price buy-sell agreements should be avoided like the plague. Before we get to the case: A fixed price buy-sell agreement is one in which co-owners of a business select a specific dollar amount, expressed either as enterprise or per-share value, for calculation of the future buyout price to be paid an exiting owner or his or her estate upon the happening of specified trigger events such as death, disability, retirement, or termination of employment. Such…
Over the years I’ve blogged about hundreds of court decisions in business divorce cases. Believe it or not, one of the things I like to do is track the cases I’ve written about — or at least those that survive the court’s decision — to see if the decisions lead to settlement as they often do but, more importantly, to see how the decisions shape the subsequent case proceedings and, of course, searching for later court rulings helpful to my business divorce practice…
I’m very pleased to present my 11th annual list of this past year’s ten most significant business divorce cases. This year’s list includes four important appellate decisions, including one likely to stand as a landmark ruling by the New York Court of Appeals on the issues of wrongful dissolution and valuation of partnerships. This year’s list also features noteworthy rulings in business divorce cases involving closely held corporations and, of course, limited liability companies on a variety of issues including standing to sue…
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…
Raise your hand if you think that a lawsuit for an accounting by the managers of an LLC simply means they have to turn over financial records. If you raised your hand, read on. If not, you can skip this post. Soon it will be ten years since the Appellate Division, First Department, in the Gottlieb v Northriver Trading case, recognized the common-law right of an LLC member to seek an equitable accounting by the LLC’s managers. In my post about Gottlieb
After two years, 300+ docket entries, and 12 motions, a lawsuit among members of a Delaware LLC that owned a 5-story apartment building on Manhattan’s Upper East Side (the “UES Building”) acquired to provide short-term rentals for international leisure and corporate travelers, and whose business was decimated by anti-Airbnb legislation, is barely past the pleadings stage and likely can look forward to years more litigation. Manhattan Commercial Division Justice Jennifer G. Schechter’s recent decision in Favourite Ltd. v Cico,