When one partner fails to respond to a notice of breach from the other partner, the relationship may be so damaged that dissolution is required. Courts may apply the ‘not reasonably practicable’ standard in determining whether a business can continue in its present form. The ‘not reasonably practicable standard’ is…
Divorcing couples that own a business together must address business ownership issues as part of the matrimonial issues, in particular the distribution of assets. An important issue when a couple divorces is how to address the family owned business in which one…
The effective date of an LLC member’s expulsion may be a critical issue in business divorce litigation and may be tied to critical events or the litigation. Courts will look at the facts and circumstances of the case before determining the effective date, but are often guided by the parties’…
The failure of the parties to submit evidence on an issue during arbitration caused a failure to decide all of the issues of the dispute. A Court may modify an arbitration award rather than vacate and permit partial enforcement while permitting litigation of claims were not included in an arbitration…
A ‘passive’ member with no rights or responsibilities in the management of a limited liability company cannot be held liable for refusing to participate in a PPP loan application. Dissociated LLC members with no management rights can withhold their voluntary consent to proposed actions. The waiver of fiduciary duties in…
A plaintiff seeking to bring a derivative claim on behalf of a corporation, limited liability company or limited partnership must be “suitable” and represent the interests of the business. A member of a limited liability company may sue individually to recover or protect the member’s individual right. New Jersey law…
How to Expel a Member from a Limited Liability Company The removal of a member from a limited liability company, known as involuntary dissociation, is permitted by statute in most states and may also be permitted in an operating agreement. Removal is permitted when a member has engaged in wrongful…
A business divorce is the process by which the owners of a business separate their business interests. The process involves negotiation and may also require litigation. These cases can be divided into four phases: the emergent phase, the examination phase, the valuation phase and the resolution phase. Most owner lawsuits…
A limited liability company member withdraws by voluntary dissociation, which occurs when the company has notice of his ‘express will” to withdraw. Voluntary dissociation terminates management rights, but not economic rights. A court may refuse relief on a claim when the plaintiff has acted with unclean hands with regard to…
There are circumstances in which a member of a limited liability company in most states may be expelled as a member from the company. This is known as involuntary dissociation. An action may be brought by the LLC seeking a court order of involuntary dissociation on the basis that the…