A New York LLC with a broad, “purposeless” purpose clause and demonstrated financial sustainability is dissolved over . . . the minority owner’s disagreement with the menu?
The Chief Administrative Judge’s 2023 Annual Report, the State of the Commercial Division, and Other ComDiv Goings-On
As one might gather from the title of this blog, we here at New York Commercial Division Practice try to make a more-than-occasional point of extolling the virtues of the Commercial Division. From its well-established reputation as a sophisticated, cost-effective, predictable, and expeditious forum to its related ability to attract businesses nationwide to litigate their disputes in New York State, when it comes to litigating commercial cases in New York, the Commercial Division is the place to be.
Every year around this time, New York’s Chief Administrative Judge publishes an annual report, which “collect[s], compile[s] and publish[es] statistics and other data with respect to the unified court system and submit[s] annually, on or before the fifteenth day of March, to the legislature and governor a report of activities and the state of the unified court system during the preceding year.” The New York State Unified Court System’s 2023 Annual Report, which was just published last week, devoted a section to the Commercial Division under the heading “A Commitment to Society,” in which the Chief Administrator praised the work of the Commercial Division Advisory Council, which, under the leadership of Robert L. Haig, Esq., has helped develop the Commerical Division into becoming “a recognized leader in court system innovation, … demonstrating an unparalleled creativity and flexibility in [the] development of rules and practices.”
New York Appellate Court’s Split Decision Involving Delaware LLC Pits “Harsh” Contractarianism Against “Fundamental Fairness”
In a split 3-2 decision last week, the Appellate Division, First Department, affirmed an order dismissing a claim to enforce an oral buy-out agreement involving a Delaware LLC as barred by the merger clause in a subsequently amended operating agreement that the plaintiff never signed. Read about it in this week’s New York Business Divorce.…
Making Finders Keepers: Unregistered Broker-Dealers and the Need for Reform
Identifying potential investors is one of the most difficult challenges facing early-stage companies. The range of amounts sought at this stage is typically greater than what could be provided by the founders and friends and family, but below what would…
Federal Court Holds the Corporate Transparency Act is Unconstitutional
On March 1, 2024, a federal district court in Alabama issued a memorandum opinion ruling on the constitutionality of the Corporate Transparency Act (CTA). The National Small Business Association and Isaac Winkles, an owner of small businesses in Alabama, sued…
Affirmation in Lieu of an Affidavit, Now “with the Same Force and Effect”
As of January 1, 2024, the amended CPLR 2106 concerning affirmations provides that
[t]he statement of any person wherever made, subscribed and affirmed by that person to be true under the penalties of perjury, may be used in an…
Injunction Junction, What’s Your Function?
Commercial litigants often seek the provisional and equitable remedy of a preliminary injunction under Article 63 of the CPLR to protect the client’s rights that are difficult to monetize and quantify. The relief sought typically involves a party restraining from…
Rare as a Dodo: Bifurcation in Business Divorce Trials
In this week’s New York Business Divorce, read about an exceptionally rare find: a bifurcated jury trial in a business divorce dispute.…
For the fourth straight year, Nassau County has chosen to freeze its annual tax roll
For the fourth straight year, Nassau County has chosen to freeze its annual tax roll. While freezing property tax rolls has proven to be popular with voters over the years, extended freezes only distort valuations and erode the overall accuracy…
And the Award for Most Creative Attempt to Evade a Book Value Buy-Sell Provision Goes To . . .
“Under any standard of value, the true economic value of a business enterprise will equal the company’s accounting book value only by coincidence . . .” says the late business valuation expert and author Shannon Pratt. So why do so many shareholder buy-sell agreements require that the shares be purchased for book value? This week’s post explores.…