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…
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…