Key Takeaways A minority shareholder oppression claim requires clear evidence of damages, including a reliable valuation of the business. In Jennings v. Simmons, the plaintiff’s failure to present valuation evidence prevented the court from awarding damages. The court ruled that without financial records or expert testimony, it could not determine…
Shareholder Disputes in closely held corporations are common and often arise from voting deadlocks, financial disagreements, and claims of minority shareholder oppression. New York law provides several legal remedies, including dissolution proceedings, buyouts, and derivative lawsuits. Preventative measures, such as well-drafted shareholder agreements, can…
Key Takeaways: When to Seek Judicial Dissolution of an LLC What is Judicial Dissolution? A court-ordered termination of an LLC when voluntary dissolution is not an option. When Should You Seek It? Deadlock among members preventing essential business decisions. Conflicts that make business operations impossible. Fraud, oppression, or…
The vast majority of the personal wealth of most business owners is the value of their business. Getting access to that trapped wealth in the owner’s business is a principal goal of a successful access plan. Business owners without an exit plan may never realize the potential value of their…
Valuing a business on an ongoing basis is intended to avoid valuation disputes in litigation and provide fairness and predictability. Courts enforce contractual language that establish the the value of a closely held business based on valuation reports conducted by the owners for non-litigation purposes. Courts are likely to view…
The fiduciary duties of loyalty and care may be different when a partnership is involved, rather than a corporation. The duties that shareholders in a corporation owe to each other are different than those owed in a partnership. Shareholders have more discretion to consider their own interests first. Understanding the…
Agreements that limit former employees from soliciting customers or disclosing confidential information are critical to protecting the value of a closely held business. Restrictive covenants and non-compete agreements are difficult to enforce and must be carefully drafted to assure that they are enforceable. …
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…
An arbitration award entered in a dispute between two parties over the alleged issuance of shares in a financing transaction was vacated by a court because of the arbitrator’s failure to issue the written award on time. In the Matter of the Application to…
In a business divorce case alleging the fraudulent acquisition of shares, once the defendant established the existence of a release, plaintiff must prove it is invalid. A claim of a fiduciary relationship does not relieve plaintiff of proving that he did not release a claim that he was the victim…