The New York Court of Appeals’ 2012 opinion in Pappas v Tzolis, decided in the wake and spirit of that court’s rulings the year before in the Centro Empresarial v America Movil and Arfa v Zamir cases, raised …
Common-Law Dissolution Hits Speed Bumps in Recent Decisions
The heyday of common-law dissolution — if it ever had one — is long past, largely displaced by a statutory dissolution remedy for oppressed minority shareholders paired with an elective buy-out option for the respondent majority shareholders.
New York’s version …
Holes in Shotgun Buy-Sell Agreement Keep Deadlock Dissolution Petition Alive
Under both New York and Delaware law, members of an LLC may petition for judicial dissolution on the grounds that the management is so hopelessly deadlocked that the LLC can no longer function in accordance with its purpose as defined …
Be Careful What You Say. It May Get You Expelled From Your LLC.
Now that I’ve got your attention, relax. At least for New York LLCs, a member can be expelled from an LLC only if expressly authorized by the operating agreement.
In my experience, expulsion provisions in LLC agreements are relatively …
Unsigned, Non-Final Operating Agreemeent Trumps Conflicting Testamentary Bequest of LLC Interest
Ten months ago, we wrote about an unusual case involving an LLC member who documented two irreconcilable membership interest transfers upon death. In Harris v Harris, 2020 NY Slip Op 31570(U) [Sup Ct, NY County Apr. 23, 2020], …
On the Menu: Steak and Equitable Dissolution
Fine dining and business divorce crossed paths in a recently decided case featuring a lengthy battle between co-equal ownership factions of the corporation that operates Delmonico’s, the renowned Manhattan restaurant established in the early 19th century and famous for …
U.S. Circuit Courts Split on Abstention Doctrine in Dissolution Cases
In 1994, in Friedman v Revenue Management, Inc., the U.S. Court of Appeals for the Second Circuit, covering New York, Connecticut and Vermont, closed federal courthouse doors in those states to petitioners seeking judicial dissolution of close corporations under …
Civil RICO: A Blunt But Elusive Tool in Business Divorce Cases
What do business divorce litigants have in common with the frill-necked lizard? At the outset of confrontation, they both use in terrorem tactics in an attempt to force their adversary into rapid submission. The lizard spreads its frill to appear …
The Oral Partnership Operating as a Corporation: Is it a Partnership? A Corporation? Can it be Both?
Oral agreements to form and operate business enterprises are a recurring subject of this blog. We’ve written many times, for example, about the comparative ease vis-a-vis other kinds of entities with which one can sufficiently allege an oral joint venture …