New York Business Divorce

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

Blog Authors

Matthew D. Donovan

Peter Mahler

Franklin C. McRoberts

Peter J. Sluka

Latest from New York Business Divorce

New York Business Divorce

Two Entities, Two Outcomes: Withdrawal and the Right to an Accounting

By Franklin C. McRoberts

September 21, 2020

In Jacobs v Cartalemi, now the leading case on the subject of LLC member withdrawal (which our firm had the pleasure of litigating), the Appellate Division – Second Department repeated a well-established principle of law: “The right to an accounting is premised upon the existence of a confidential or fiduciary relationship and a breach of the duty imposed by that relationship respecting property in which the party seeking the accounting has an interest.” The…

New York Business Divorce

Business Divorce Nation: A Cross-Country Tour of Recent Decisions of Interest

By Peter Mahler

September 14, 2020

There’s tremendous diversity from state-to-state when it comes to statutory and judge-made law in business divorce cases. The basic fact patterns one sees in cases from across the country, however, don’t vary nearly as much. This juxtaposition of divergent law and convergent fact patterns makes it all the more interesting to follow case law developments from outside my home state of New York, to see how the outcomes and rationales differ from, or resemble those,…

New York Business Divorce

A Partnership Dissolution in Three Acts Over Fifteen Years and Counting

By Peter Mahler

September 7, 2020

With apologies to the King James Bible, what the Manhattan real estate market giveth, a poorly conceived partnership agreement taketh away. It’s the best explanation I can offer for three successive lawsuits lasting almost fifteen years and counting between two partners in a general partnership that owns a full-floor unit in a commercial co-op building in Manhattan’s Garment District and, since the death of one of the partners in 2011, between the deceased partner’s estate…

New York Business Divorce

Departing LLC Members: Exercise Your Put Option Before Insolvency Approaches

By Peter J. Sluka

August 31, 2020

Several weeks ago, I had the pleasure of first appearing on this blog, with a piece about a Delaware Chancery Court decision considering—as a matter of apparent first impression—whether an LLC could exercise, then walk back a call option allowing the LLC to purchase a member’s interest at a price established by a three-appraisal process. I am equally pleased to return this week to weigh in on a recent decision by Justice Masley of the…

New York Business Divorce

Enforceability of Oral Operating, Shareholder, and Partnership Agreements

By Franklin C. McRoberts

August 24, 2020

Oral agreements – and oral modifications of written agreements – are a constant source of litigation in business divorce cases. Alleged oral agreements are subject to attack based upon legal enforceability – as well as their ability to be proven with adequate evidence. As a general matter, legal enforceability of an alleged oral agreement among business owners concerning their rights as owners depends first and foremost upon the kind of entity involved. Limited Liability Companies…

New York Business Divorce

Summer Shorts: For-Cause Termination of LLC Member and Other Decisions of Interest

By Peter Mahler

August 17, 2020

Usually I open my annual Summer Shorts post with some breezy comment about summer vacations, travel, or poolside reading. But this shelter-at-home year we find ourselves living and working in profoundly different circumstances, so I’ll skip the usual pleasantries and get straight to the subject matter consisting of short summaries of five recent decisions of interest involving disputes between business co-owners, four by New York courts and one from Mississippi. This year’s summaries include: a…

New York Business Divorce

Dissolve for Failure to Elect a Board? Better Demand an Election First

By Peter Mahler

August 10, 2020

New York’s Business Corporation Law (BCL) provides three pathways for non-controlling shareholders to achieve involuntary (judicial) dissolution. The first two are well known to business divorce practitioners and to regular readers of this blog: a petition under BCL § 1104 (a) by a shareholder holding 50% of the voting shares on the grounds of director deadlock, shareholder deadlock, or “internal dissension and two or more factions of shareholders are so divided that dissolution would be…

New York Business Divorce

A Business Divorce Rarity: The Jury Trial

By Franklin C. McRoberts

August 3, 2020

The mystique of the jury trial is deeply embedded in the social consciousness of our country. Non-lawyers who think of litigation tend to recall courtroom thrillers like To Kill a Mockingbird, Erin Brockovich, or Philadelphia. These movies, like the vast majority of courtroom dramas, depict jury trials. Since the public so closely associates trials with juries, litigants are sometimes disappointed to learn that jury trials are uncommon in business litigation generally, and exceedingly rare in…

New York Business Divorce

Does an LLC Member Have Absolute Power to Withdraw from the LLC?

By Peter Mahler

July 27, 2020

Some years ago I had the good fortune to join the ABA Business Law Section’s Committee on LLCs, Partnerships and Unincorporated Entities which, among its other scholarly pursuits in the field of alternative entities, organizes the incomparable LLC Institute held annually. The law professors, practicing attorneys, and other professionals who comprise the Committee’s membership, and who reconvene each year at the LLC Institute to keep abreast of developments in the law, renew acquaintances, and celebrate…

New York Business Divorce

“Rank Pretext Will Not Do”: Court Enjoins Freeze-Out Merger With No Corporate Benefit

By Peter Mahler

July 20, 2020

I’ve represented clients on both sides of freeze-out mergers of privately owned business entities, so I’m very familiar with their uses, misuses, potential advantages, and potential disadvantages to both freeze-ors and freeze-ees. Over the years this blog has featured numerous articles about cases involving freeze-out mergers which you can readily access by clicking on the Topics dropdown menu on the right sidebar and selecting Freeze-Out Merger. If you do, you will find that, when it…

New York Business Divorce

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

Blog Authors

Two Entities, Two Outcomes: Withdrawal and the Right to an Accounting

Business Divorce Nation: A Cross-Country Tour of Recent Decisions of Interest

A Partnership Dissolution in Three Acts Over Fifteen Years and Counting

Departing LLC Members: Exercise Your Put Option Before Insolvency Approaches

Enforceability of Oral Operating, Shareholder, and Partnership Agreements

Summer Shorts: For-Cause Termination of LLC Member and Other Decisions of Interest

Dissolve for Failure to Elect a Board? Better Demand an Election First

A Business Divorce Rarity: The Jury Trial

Does an LLC Member Have Absolute Power to Withdraw from the LLC?

“Rank Pretext Will Not Do”: Court Enjoins Freeze-Out Merger With No Corporate Benefit

Stay Connected

Company

Products

Support

New to the Network