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Articles Posted in Dissolution

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Deadlock Requires Finding of Harm to Corporation

Deadlock is more than an inability to make a decision.  It is an inability to act under circumstances that present the real threat of harm to the business. Deadlock is triggered by the shareholders’ inability to elect directors. When there are no alternatives to prevent harm to the business, like…

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Deadlock in the Closely Held Business

Deadlock is the inability of the owners of a business to make critical decisions, a paralysis of the management of closely held corporation, limited liability company or partnership. The inability to maintain normal operations is a characteristic of a deadlocked business. Courts will intervene to prevent harm to a deadlocked…

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Business Divorce: Sources of the Law

The law that controls any business organizations is a creature of state law, and disputes among owners in a business divorce involve the application of the law where the business was formed. More often than not that means the law of the state in which the dispute is being heard,…

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Shareholder Deadlock Grounds to Sell Corporation

Is an intractable deadlock among the shareholders good grounds to force the sale of a large, successful corporation? That was the issue before the Delaware Supreme Court in a case in which the trial court’s decision to sell the business as a going concern – over the objection of one…

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Unanimous Consent of LLC Members Not Required to Continue Company

It may take a unanimous action of the members of a limited liability company to dissolve the entity or to change the date on which the company will dissolve according to the terms of its operating agreement. But unless the Operating Agreement specifically requires the members to act unanimous to…

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Texas Appeals Court Affirms Partnership Dissolution Verdict

A partnership has no obligation to complete performance of its executory contracts, the Texas Court of appeals held in affirming a multi-million dollar trial court verdict involving a chain of TGI Fridays in Dallas. The case involved a joint venture formed with TGI Fridays and several entites that qualified as…

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Seven Business Litigation Best Practices that Address the Lack of Civil Trials

Here is the hard reality.  The chances that your case, or any case, will get to a real trial on the merits is way less than one in 10.  The truth is that only between two and five cases out of 100 will be resolved with a trial. What does…

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LLC Member Enjoined from Competition

An LLC member breached his fiduciary duty by competing with his own company, a trial court in New York City holds in issuing an injunction against one of the principals of a successful company that makes automated parking systems. The case involves the company that makes Parkmatic parking systems, mechanical…

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Claims for Judicial Dissolution Not Easily Withdrawn

New York’s oppressed shareholder statute has a unique provision that was initially intended to prevent the oppressed shareholder from destroying a viable business.  That is because the New York statute otherwise gives the court only two options: send the oppressed shareholder away or force the dissolution of the business. Other…

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An Apology at the Bargaining Table

One of the hardest things about being an effective negotiator is the ability to leave your ego at the door.  We need to listen, not impress. Seasoned Negotiators, Effective Apologies As negotiation trainer Jim Camp warns, an effective negotiator learns how to let the other side be “ok,” even when…

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