A year ago I wrote a piece called The Elusive Surcharge in Dissolution Proceedings highlighting the rare appearance in the case law of the surcharge provision found in Section 1104-a (d) of the Business Corporation Law. The provision allows a court in dissolution proceedings brought by an “oppressed” minority shareholder to “order stock valuations be adjusted and may provide for a surcharge upon the directors or those in control of the corporation upon a finding of willful or reckless dissipation or transfer of assets or corporate property without just or adequate compensation therefor.” If something strikes you amiss, at least as to the provision’s first clause concerning stock valuation, you’re not alone.  View Full Post
Divorcing Husband Not Smiling Over Court’s Rejection of Ownership Interest in Wife’s Dental Practice The self-proclaimed entrepreneur and guiding force behind his soon-to-be ex-wife’s highly successful, multi-office pediatric dental practice known as Kiddsmiles is not smiling after the court in Savel v Savel, Short Form Order, Index No. 006375-15 [Sup Ct Nassau County May 19, 2017], dismissed his claim, among others, to impose a constructive trust upon 50% of his wife’s ownership interest in a series of professional limited liability companies. View Full Post
Calling an Organization a Partnership Doesn’t Make it One, But Not Calling it a Partnership Doesn’t Make it Not One. Got It? Did you know there’s such a thing as an “inadvertent partnership”? The basic definition of a partnership, under both the original Uniform Partnership Act (1914) and the most recent version of the Revised Uniform Partnership Act (1997), is “an association of two or more persons to carry on as co-owners a business for profit.” The later Act, in Section 202 (a), adds a caveat not found in the original: “whether or not the persons intend to form a partnership.” An unintentional partnership? View Full Post
A Member By Any Other Name . . . May Have Access to LLC Books and Records Register Now for the LLC Institute! I’ve said it before, I’ll say it again: for professionals who dwell in the world of LLCs, whether as transactional, tax, or litigation counsel, attending the annual, two-day LLC Institute, sponsored by the LLCs, Partnerships and Unincorporated Entities Committee of the ABA’s Business Law Section, is the best way to stay abreast of developments in the law of alternative entities and to mix with leading scholars and practitioners from across the country.  View Full Post
Court Defines “True Deadlock” Register for the LLC Institute Before It’s Too Late! I’ve said it before, I’ll say it again: for professionals who dwell in the world of LLCs, whether as transactional, tax, or litigation counsel, attending the annual, two-day LLC Institute, sponsored by the LLCs, Partnerships and Unincorporated Entities Committee of the ABA’s Business Law Section, is the best way to stay abreast of developments in the law of alternative entities and to mix with leading scholars and practitioners from across the country.  View Full Post
If you haven’t yet listened to prior episodes of the Business Divorce Roundtable (a) it’s time you did and (b) absolutely you won’t want to miss the latest episode (click on the link at the bottom of this post) featuring first-hand, real-life, business divorce stories told by business appraiser Tony Cotrupe of Melioria Advisors (photo left) and attorney Jeffrey Eilender of Schlam Stone & Dolan (photo right). View Full Post
Summer Shorts: Three Must-Read Decisions Regular readers of this blog know it’s been anything but summer doldrums in the world of business divorce, what with case law developments such as the Appellate Division’s potentially far-reaching ruling on the purposeless purpose clause and LLC dissolution in Mace v Tunick reported in last week’s post, and the astonishing story of minority shareholder oppression in the Twin Bay Village case also reported earlier this month. View Full Post