Majority Owners of closely held businesses may face claims that they engaged in minority oppression of shareholders, limited liability company members or partners. Defending the minority oppression claim requires examination of written agreements and consideration of the reasonable expectations of the owners when the business was formed. Claims of minority…
The failure of the parties to submit evidence on an issue during arbitration caused a failure to decide all of the issues of the dispute. A Court may modify an arbitration award rather than vacate and permit partial enforcement while permitting litigation of claims were not included in an arbitration…
A court may immecdiately grant the plaintiff a restraining order or preliminary injunction when there is a valid trade secret claim and the plaintiff may suffer irreparable harm without it. Courts make the determination whether an injunction is necessary based on the evidence presented by the plaintiff at an initial…
An equitable accounting is a cause of action that requires those in control of the finances of a closely held business to account for their use of the money. An accounting a two-stage process. First the controlling party must render an account of how it used the assets of the…
There is no statutory right to receive a distribution of profits from a limited liability company before it dissolves and winds up its affairs. Distributions before then are discretionary. Profit distributions are in the discretion of the majority members or commonly in the discretion of the managers of the limited…
Statutes that protect the rights of the owners of trade secrets protect against ‘misappropriation’ of confidential information, which requires a defendant to take or use the trade secret without permission. The inevitable disclosure doctrine can prevent an employee from working for another when the new job would inevitably require the…
Enterprise goodwill is the expectation that a business has in the continued patronage by its customers, regardless of the individuals involved. Personal goodwill is the expectation of continued patronage because of an individual’s continued participation in the business. Personal goodwill is not an asset owned by a business, but it…
The ‘Internal Affairs Doctrine’ requires that a court apply the law from the state in which a business was organized to disputes among the shareolders or LLC members. The ‘Single Enterprise Theory’ permits a court to treat multiple entities with common ownership as though they were one. In disputes involving…
A ‘passive’ member with no rights or responsibilities in the management of a limited liability company cannot be held liable for refusing to participate in a PPP loan application. Dissociated LLC members with no management rights can withhold their voluntary consent to proposed actions. The waiver of fiduciary duties in…
The Internal Affairs doctrine requires a court to apply the law of the state where a business was formed, or organized, to disputes between the owners regardless of the circumstances. New Jersey courts have applied a more traditional analysis of conflict of laws issues and may refuse to apply the…