Is it a partnership? Is it an LLC? Can it be both? In this week’s New York Business Divorce, read about a novel application of the rules of law governing partnerships and LLCs to the same business entity simultaneously to achieve a solution that would not been possible if strictly applying the laws of one or the other.
Summer Shorts: Judicial Dissolution Meets the Dead Man’s Statute, and Other Recent Decisions of Interest
This week’s NYBD presents the 16th annual edition of Summer Shorts offering brief commentary on three recent decisions involving disputes among LLC members.
Power Players / Power Struggle: First Department Affirms Dismissal of Shareholder Class Action Challenging Energy Company’s Take-Private Merger
Let’s say you are a minority interest holder facing a squeeze-out merger. If someone else controls the process, the price, and the paperwork, how do you know the deal was fair? Can a minority shareholder that also holds a meaningful stake in the controller really be counted among the “disinterested” minority in a vote of
“Knowing” and “Intentional” Defalcation Yields Goliath Punitive Damages Award
Sometimes, we encounter business owners who just can’t seem to differentiate themselves from the businesses they own. In this week’s New York Business Divorce, the owner of an automobile dealership group had the book thrown at him with a massive punitive damages award after helping himself to the business’s working capital.
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Brooklyn Cases Test the Procedural Boundaries of Shareholder Oppression
Two recent Brooklyn decisions test the procedural boundaries of shareholder oppression—one rejecting a standalone damages claim outside dissolution, the other sending a properly commenced dissolution proceeding down a plenary path.
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Co-Director Removal and the Business Judgment Rule
Corporate management takes the win in this week’s New York Business Divorce with what appears to be the first New York appellate decision to apply the business judgment rule to a decision by a board of directors to oust one of its own under the “cause” standard for removal found in Section 706 of the Business Corporation Law. Whether there is, or is not, “cause” to fire a co-director, held the Court, is a matter falling comfortably within the board’s business judgment, even as a response to aggressive activism. So behave on that board. Otherwise, your colleagues may show you the door.
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Signature Pages and Sibling Mistrust: First Department Revives Fraud, But Manager Removal Remains Out of Reach
Some business divorce cases are about money. Others are about control. Today’s case, Homapour v 3M Properties LLC, 2026 NY Slip Op 04371 (1st Dept 2026), is about both.
As we often see with second and third generation closely-held family businesses, the informal trust and family hierarchy that may have helped build the enterprise
Wait a Minute! Just Because I Failed to Meet a Lousy Capital Call, You Took My Membership Interest That You Valued at $1.7 Million and Paid Me Nothing?
Consider the case of the LLC member who failed to meet a capital call and consequently was forced to sell its minority LLC interest valued by the managing member at $1.7 million, to the managing member in exchange for a non-recourse promissory note with no maturity date and no payments unless the former interest generates after-tax distributions, of which there were none to date. Found out how the courts ruled in this week’s NYBD post.
Multigenerational Intrafamily Business Dispute Defeated for Lack of Standing
In this week’s New York Business Divorce, we encounter an unusual combination of adverse litigants: father and son versus mother and son duking it out in not one, not two, but three lawsuits simultaneously.
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The Derivative Claim and the Majority Approval Trap
Can an operating agreement require majority approval before a minority member may sue derivatively? A recent Delaware decision warns against letting authority provisions swallow the derivative claim whole.
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