Dispute Related to Repurchase of Shares Under Buy-Sell Agreement Subject to Agreement to Arbitrate Agreements to arbitrate are frequently added to buy-sell agreements and other corporate governance contracts. These agreements will be enforceable in nearly all circumstances and the parties should be certain that arbitration – rather than litigation in…
Court Issues Writ of Execution on Minority LLC Interest of Ex-Spouse One of the perceived benefits of the limited liability form of doing business is the limited remedy that a creditor has when attempting to use the LLC member’s interest as a source to satisfy a judgment. The majority position has…
Operating Agreements for Limited Liability Companies to Change Under Revised Limited Liability Company Act Part of an ongoing series on the adoption of New Jersey’s revised limited liability company act. The amendments to the New Jersey’s Limited Liability Company Act, N.J.S.A. 42:2C-1-94 that begin to take effect in March 2013 will…
Fraudulent Inducement Claims Rejected by Court In Shareholder Buyout Dispute The broad release language contained in a buyout agreement is enforced, despite claims of fraudulent inducement, affirms the Appellate Division of Superior Court in Marino v. Twin Rivers Podiatry, P.A., Docket No. A-5630-10T1 (May 19, 2012). This short opinion is…
Employee Held Liable for Actively Competing With Current Employer The success of businesses in specialized fields often depends on the employees’ ability to deliver consistent-quality service and implement specialized techniques and processes. Business owners in these fields know that the costs of investment in employee training and development can be…
Limited Liability Company Act Transforms Principles of LLCs A new set of laws governing New Jersey limited liability companies will become effective in March. The changes are profound. The Limited Liability Company Act fundamentally changes a number of bedrock principles about the manner in which limited liability companies are organized and managed. Limited Liability…
Corporate Dissolution Claims of Foreign Entities Not Proper Corporations and other business entities are creatures of the law of the state where they were organized. Delaware and Nevada, for example, compete as the state of choice when organizing a new business entity. And the simple fact is that most of the businesses organized under…
LLC Member Who Refused to Retire Was Expelled by Managers The challenges in making the transition from the the founding members of a successful enterprise to the second generation of managers are often difficult, as this litigation involving that has endured for nearly a decade demonstrates. It may be that the business has…
The New Jersey Appellate Division affirmed a trial court decision holding that lease renewals would revive stale claims in a partnership dispute. In Munoz v. Perla, et al., A-5922-08T3, the Munoz brought claims, among others, for breach of fiduciary duty for his partners’ failure to charge fair market rates in…
Disputes Between Shareholders Not Exempt from Arbitration Act An oppressed shareholder claim is not outside the reach of the New Jersey Arbitration Act, the Appellate Division of Superior Court held in litigation that appears to arise in significant part from a broken promise over the lease of a BMW. The…