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…
A business divorce is the process by which the owners of a business separate their business interests. The process involves negotiation and may also require litigation. These cases can be divided into four phases: the emergent phase, the examination phase, the valuation phase and the resolution phase. Most owner lawsuits…
Limited liability company statutes often require the unanimous approval of the members before actions may be taken outside the ordinary course of business or for any amendment of the Operating Agreement. The requirement for unanimous action creates a minority veto – any member can veto the actions of the majority…
An arbitration award entered in a dispute between two parties over the alleged issuance of shares in a financing transaction was vacated by a court because of the arbitrator’s failure to issue the written award on time. In the Matter of the Application to…
In a business divorce case alleging the fraudulent acquisition of shares, once the defendant established the existence of a release, plaintiff must prove it is invalid. A claim of a fiduciary relationship does not relieve plaintiff of proving that he did not release a claim that he was the victim…
In a dispute among general partners, a single verbal threat against spouse of one of the partners does not create a claim for intentional infliction of emotional distress. CHERYL E. CHAMBERS, J.P. SYLVIA O. HINDS-RADIX COLLEEN D. DUFFY ANGELA G. IANNACCI, JJ. In August 2007, the plaintiff and the defendant…
An ordinary contract, even between close friends, does not create a fiduciary relationship from which a court will find an equity interest. Dominic Thomas Karipaparambil, Plaintiff-Appellant, v Robert Michael Polus et al., Defendants-Respondents. Judgment, Supreme Court, New York County (Jennifer G. Schecter, J.), entered March 10, 2021, dismissing…
An agreement prohibiting a former associate of a law firm from competing with his former employer within 90 miles of New York City was void and unenforceable. Solicitation of the clients of a law firm by a former associate may be actionable, even if a potential restriction on practice, in…
A former employee will violate the computer fraud and abuse act only by having unauthorized access to data, not by using data for an unauthorized purpose. Former owners or employees that access computer systems after termination may be liable under the Computer Fraud and Abuse Act. A federal claim based…