Resolving ownership disputes with a buyout at auction has a tempting simplicity. The buyout gives the owners the divorce they need. And the auction—particularly a blind auction, in which no owner is aware of the other’s bid—arguably leaves little room for dispute over the value of the company. For these reasons, it is easy to
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The Pathology of Deadlock Dissolution
It seems a bit exaggerated to liken the deterioration of a relationship between 50/50 business partners to a fatal disease, but in the case of Pathology Associates of Ithaca, P.C., recently pronounced dead by act of judicial dissolution, the comparison may be apt.
The story of Pathology Associate’s demise seems to be more about a
A Lesson In Drafting Capital Call Provisions
Those of us who follow the Delaware Chancery Court’s output are regularly treated to lengthy, detailed, finely crafted opinions sometimes in excess of 100 pages. Opinions of that length from our New York state court judges are almost as rare as hen’s teeth, which is understandable given the massive volume of cases and the tsunami
Valuation Decision Finds LLC “Worthless, Worthless, Worthless”
The chorus to one of Neil Young’s most sublime songs is “Helpless, helpless, helpless.”
If composed in song, the chorus to a recent valuation decision by Manhattan Commercial Division Justice Andrea J. Masley would be “Worthless, worthless, worthless.”
Justice Masley’s valuation decision in Quattro Parent LLC v Rakib, 2022 NY Slip Op 30190(U) [Sup Ct
Singin’ the Derivative Plaintiff Blues
If you ask me to name the most common skirmishes over the adequacy of pleadings at the outset of business divorce litigation, at or near the top of the list are motions to dismiss a dissident owner’s direct claims that should have been brought derivatively, or derivative claims that should have been brought directly, or
Too Little, Too Late: Court Sides with Ousted Member, but Denies Preliminary Injunction Undoing Termination
We often cover preliminary injunctions on the pages of this blog because they are a powerful tool in the business divorce litigator’s toolbox: they force court action early in the case, they can protect rights that are difficult to monetize, and they set the tone for the litigation going forward. Requests for preliminary injunctions generally
Court Enjoins Dilution of Brewing Company LLC Membership Interest
Most folks associate beer with pleasure. Beer brings the happy, and many craft brewers will tell you they went into business for that very reason. But an investor in a Bushwick, Brooklyn beer brewing company and taproom startup was anything but happy after his co-members began taking steps to dilute his membership interest in the
Common-Law and Equitable LLC Dissolution: Going, Going, . . .
Recently, we’ve written two articles focusing on the brewing dispute over whether New York law recognizes a viable cause of action for “common-law” or “equitable” dissolution of a limited liability company.
In October 2020, I blogged about a pre-answer dismissal decision in Pachter v Winiarsky, in which a New York court for the first
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 of the statutory remedy, section 1104-a of the Business Corporation Law enacted in 1979, authorized
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 its signature dish, the Delmonico steak, among other dining firsts.
Delmonico’s can now lay claim