A New Jersey Court conducing the valuation of a business may use any technique or method generally acceptable in the financial community. The application of a minority discount is a question of law, but likely will be based on the factual determinations of the court about the culpability of the…
The touchstone of a trade secret is that it provides the owner of the information with a competitive advantage in their market. Courts look at the cost of development, the difficulty in duplicating and measurable benefits to ascertain whether a bona fide trade secret exists. The first step in the…
Limited Liability Company laws in New Jersey and many states provide a cause of action for the oppression of minority members of company against those in control of the business. Oppression of a minority LLC member is measured by the reasonable expectations of the minority member in those states that…
Minority shareholders of a closely held corporation may be subjected to oppressive conduct by the controlling majority that deprives them of the benefits of their investment. Oppressed minority shareholder actions vindicate the rights of the minority owner to participate in the management and share in the economic benefits of the…
A plaintiff seeking to bring a derivative claim on behalf of a corporation, limited liability company or limited partnership must be “suitable” and represent the interests of the business. A member of a limited liability company may sue individually to recover or protect the member’s individual right. New Jersey law…
To enforce a claim for misappropriation of a trade secret, the plaintiff must prove that the information was secret and valuable. Plaintiffs in New Jersey can rely on either the common law or the New Jersey Trade Secrets Act. Secrets that have been publicly disclosed lose their their protection as…
The Federal Trade Commission is considering an administrative rule that would enact a broad ban on non-compete agreements that would prohibit contracts that restrict the employee from working for a competitor or starting a competing business. The rule would also apply to ‘de facto’ non-competes, such as non-solicitation agreements, that…
An agreement that barred a lawyer from soliciting clients within a geographic area was unenforceable after the lawyer left the firm under the rules governing the professional conduct of attorneys. An agreement prohibiting a former associate attorney from soliciting clients of the firm after his resignation may be enforceable in…
Well-drafted business governance documents include buy-sell agreements to address deadlock among the owners. A shotgun buy-sell is an offer that sets only the price. It can be accepted as either an offer to buy out the other side or to sell to the other side at the price in the…
How to Expel a Member from a Limited Liability Company The removal of a member from a limited liability company, known as involuntary dissociation, is permitted by statute in most states and may also be permitted in an operating agreement. Removal is permitted when a member has engaged in wrongful…