When is a partnership dissolution not a dissolution? When the partnership is not subjected to the formal dissolution procedures, even if it appears that the Court may have intended otherwise. Express Finding of Dissolution of Partnership Required That was the result of a split decision of the Fifth Circuit Court…
Articles Posted in Dissolution
Business Divorce New York Style
Reading through a recent court opinion out of the New York Supreme Court, I am struck by the way the law has diverged in corporate governance litigation. There are two distinctly different approaches to the business divorce. Crossing the Hudson can make a world of difference in operating a closely…
Partnership Dissolution Presents Factual Issues
In a case turning on an unusual provision in West Virginia partnership law, the state Supreme Court sent a partnership dissolution action back to the trial judge to determine whether the plaintiffs were actually partners of the partnership that they were trying to dissolve. The opinion in Sugar Rock, Inc.…
Trial Judges Have Discretion to Dissolve an LLC or Dissociate a Member
Petitioning members and managers of limited liability companies need to choose carefully between dissolution and dissociation of a member when they initiate litigation to expel a “bothersome” member. If the petitioning member includes grounds for both, they will not be able to choose the preferred remedy. Rather, the trial judge…
Partner Who Wrongfully Dissolved Partnership Hit With Whopping 66% Minority Discount
Talk about playing your cards wrong. A partner with a 3.08% interest worth $4.85 million in a partnership that owns a major shopping mall likely will walk away with only a few hundred thousand dollars after a court decision finding that he wrongfully dissolved the partnership and deducting from the…
Limited Liability Company Breakup: Crossing the Hudson Makes a Difference
LLC Divorce: Till Death Do Us Part, or Just Irreconcilable Differences Should a business divorce be hard or easy? In the world of human divorces, it’s the difference between no-fault divorce and divorce only after a showing of cause. In the world of businesses, it turns on the concept of…
Attachment of LLC Interest in Management Dispute
A recent dispute involving the owners of a medical office building demonstrates, once again, how unexpected business governance issues can threaten an ongoing business. This opinion from the Appellate Division, in New Jersey Realty Concepts, LLC v. Mavroudis, Docket No. A-2013-12T1 (App. Div. March 18, 2014)(opinion here), demonstrates how the…
No Shareholder Oppression in Refusal to Buy Minority Interests
Holding a family business together gets more difficult as time passes, as this recent opinion from the Appellate Division demonstrates. A rift between the family members still working for, and in control of H. Schultz & Sons, resulted in the minority members who stopped receiving dividends while the company was…
Expelled LLC Members: No Right to Force Purchase
Removal of LLC Member May Be ‘Prospective’ Conduct In what is probably the most significant appellate decision involving New Jersey limited liability companies in a decade, the Appellate Division held that wrongful conduct is not required to expel a member from the LLC, nor is the member entitled to…
Shareholder Oppression Claim Requires Trial
Claims of Shareholder Oppression Are Disputed by Majority Owner A motion for judicial dissolution of a retail business based on the claims that the majority owner had oppressed the minority shareholders should be denied when the facts are in dispute. An evidentiary hearing is necessary to resolve the disputed issues. …