This case goes into the “be careful what you say” category – particularly when it’s under oath, and particularly when you are involved in an oppressed shareholder action, or any other type of business divorce, for that matter. Oppressed Shareholder Litigation Oppressed shareholder actions almost invariably involve the purchase of…
The Business Divorce Law Report
Minority and Marketability Discounts in Oppressed Shareholder Cases
The important battle in an oppressed shareholder lawsuit most often is the battle of the valuation experts. And almost inevitably, the parties will litigate the minority discounts and discounts for lack of control that may or may not be applied to the minority interest. As we previously discussed here, business…
LLC Does Not Distribute Clients on Dissolution
When a limited liability company dissolves, it pays its creditors and distributes the remaining assets in the winding-down process. Many professional practices are organized as LLCs, and their principal assets are the clients they serve. That does not mean, however, that the professional limited liability company in dissolution has to divide up…
Fiduciary Duties in Unfair Competition Case
You just learned that an employee secretly formed and operated a competing business while employed by you. Is there a claim against the competing business or just the employee? Most likely there are viable claims against both. The fiduciary duties of the employee are likely to be imputed to the company he or she formed.…
Employer E-Mail Policy Creates Privacy Rights
As an employer, we may assume that because we own the computer equipment, that includes any data left on there by our current or former employees. Thus, if an employee wants to use company time or our equipment for personal e-mail, then they do so at their own peril. If…
Indemnification of Director Despite Judgment of Wrongdoing
Most corporations include broad indemnification provisions in their by-laws that are intended to protect directors and officers from the costs of lawsuits claiming wrongdoing. Those corporate provisions, however, as well as the statutory provisions that permit indemnification have an important caveat, an officer or director cannot be indemnified against intentional…
Partnership Agreement Disclosure to Labor Union Pending Trial Court Decision
In some circumstances, a business may be able to claim that its organizational documents are trade secrets. That seems to be the holding of a trial court decision insulating a partnership agreement from disclosure to a labor union. The case is interesting because non-management owners do not generally have free…
Court Defers to Management’s Liquidation Value in Dissenting Shareholder Value
The Business Judgement Rule presumes that a decision made by a majority of the board of directors in business matters is entitled to deference. Courts generally will not interfere with decisions that fall under the Business Judgment Rule. Courts disregard the Business Judgment Rule when there is evidence of bad…
Written Agreement Defeats Claimed Oral Partnership
Oral agreements and even an extended course of dealing probably will be insufficient under New Jersey law to contradict the language of a written agreement, even if by all outward appearances a partnership existed. An Appellate Division decision finding that no partnership between attorneys who practiced together for 11 years…
Judges and Lawyers: FB Friends?
Is it ok for lawyers to have FaceBook friends who are judges? Francis Pileggi, a Delaware corporate litigator writes about a recent Ohio professional ethics opinion that says it’s alright that FB friends are different than real friends, which is sometimes true and sometimes not. (Blog Post here) Lawyers Use…