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Business Divorce

Representing owners of privately held businesses in disputes with business partners and corporate dissolutions.

All too often, relations among co-owners of privately held businesses deteriorate to the point where they can no longer work together: They need a “business divorce.” Our business divorce group brings together the diverse practice skills and experience required for the myriad challenges presented by private company disputes and to devise solutions that allow clients to achieve their business and personal goals free of the uncertainty and rancor that can accompany a failed business relationship.

We Understand the Intricacies of Business Divorce Law

Our business divorce team includes highly experienced litigators who understand the intricacies of the laws governing the internal affairs of closely held corporations, partnerships, and limited liability companies. Their extensive representation of clients in private company disputes includes:

  • Judicial dissolution proceedings on behalf of both majority and minority owners.
  • Dissenting shareholder proceedings, derivative suits, books and records proceedings.
  • Other litigation among co-owners of companies in a wide variety of industries including real estate, construction, manufacturing, finance, a variety of wholesale and retail operations, auto dealerships, service companies, and more.

A Multidisciplinary Practice

The business divorce group also includes highly experienced corporate and tax attorneys who advise clients and assist in structuring and documenting buy-outs, liquidations, and other forms of business reorganization resulting either from judicial proceedings or negotiated settlements.

Pre-Litigation Resolution

Often the litigation of private company disputes can be avoided by early intervention leading to a favorable out-of-court settlement. Our business divorce team works closely with clients to explore and execute strategies and solutions that can eliminate the distraction, expense, and escalation of hostilities that inevitably accompany litigation. Key to the business divorce group’s record of success in resolving such disputes through early intervention is their reputation and prowess as attorneys well-equipped and unhesitant to seek relief in court when negotiations fail to achieve their clients’ objectives.

Accurate Business Appraisal

The resolution of a business divorce often centers on the valuation of the subject company. Effective legal counseling, therefore, requires a thorough understanding of the principles and legal framework for valuing a business. The business divorce group has extensive experience working in tandem with qualified business and real estate appraisers in connection with buy-out negotiations and appraisal litigation.

Thought Leaders

Members of the business divorce group are acknowledged leaders in their field. Our attorneys frequently lecture on business divorce topics before professional organizations, can be heard interviewing leading academics and experts on the Business Divorce Roundtable podcast, and publish numerous articles on the subject including the widely followed New York Business Divorce blog, which has also been cited in a number of judicial opinions.

View Business Divorce PDF

Professionals

Hamutal Lieberman

Associate
New York City

Matthew D. Donovan

Partner
New York City

Lyle C. Mahler

Partner
Uniondale

Peter A. Mahler

Partner
New York City

Stephen F. Melore

Partner
Uniondale

Louis Vlahos

Partner
Uniondale

James M. Wicks

Partner
Hauppauge

Aaron E. Zerykier

Partner
Uniondale

Peter B. Zlotnick

Partner
New York City

Franklin C. McRoberts

Counsel
Uniondale

Paige D. Bartholomew

Associate
Uniondale

Recent Blog Posts

Third Time’s Not a Charm in LLC Dissolution Case

As it approaches its sixth anniversary with little sign of letting up, the highly contentious litigation between brothers and business…

April 22, 2019

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April 22, 2019

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The Law Firm “Partner”- A Rose by Any Other Name . . .

One of the great ironies of New York business divorce litigation is that so much of it involves the breakup of…

April 15, 2019

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April 15, 2019

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Disclosure of Estate Tax Stock Appraisals in Shareholder Disputes

The discoverability of materials in civil litigation in general resists any hard and fast rules, other than that the scope of discovery…

April 01, 2019

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April 01, 2019

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Arbitrating Deadlock: A Conversation with Arbitrator Erica Garay

When 50/50 co-owners of a business are deadlocked on a major business decision, unless they have a written agreement in…

March 25, 2019

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March 25, 2019

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A Pig in a Poke: The Rollercoaster Kadosh Settlement Litigation

Years ago, we wrote about the perils of “impromptu” settlements in business divorce cases – settlements eked out at the…

March 15, 2019

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March 15, 2019

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A Cross-Country Tour of Five Recent Stock Appraisal Cases

When it comes to business valuation principles in contested appraisal proceedings, I’d say the 50 states have far more in common than…

March 10, 2019

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March 10, 2019

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Throwing Grenades and Casting Plagues Upon Your Fellow Directors: A Lesson in Fiduciary (Ir)responsibility

This week’s post is by Matthew D. Donovan, a commercial litigation partner and member of Farrell Fritz’s business divorce practice group.  There is…

March 04, 2019

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March 04, 2019

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Judicial Dissolution as the Nuclear Option When Other Means Falter

nu•cle•ar op•tion (noun): the most drastic or extreme response possible to a particular situation The litigation arsenal of business divorce lawyers contains…

February 25, 2019

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February 25, 2019

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Sue for Dissolution – Get Sued for Defamation?

It’s simply in the nature of things that business divorce litigants tend to accuse one another of all manner of heinous,…

February 19, 2019

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February 19, 2019

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Winter Case Notes: Oppression of the “Gifted” Minority Shareholder and Other Recent Decisions of Interest

Notwithstanding we’ve had no more than a dusting of snow thus far in my downstate New York neck of the woods, welcome to another…

February 11, 2019

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February 11, 2019

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The Bad-Faith Petitioner Defense Makes Successful Debut in LLC Dissolution Case

What’s become known as the bad-faith petitioner defense in judicial dissolution proceedings first emerged in Matter of Kemp & Beatley, 64 NY2d…

February 04, 2019

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February 04, 2019

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Minority Shareholder Oppression in the #MeToo Era

In the last two years, fueled by a series of high profile cases involving media executives, entertainers, and other public…

January 28, 2019

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January 28, 2019

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A Fresh Take on an Old Doctrine – The “Adequate, Alternative Remedy” to Dissolution

After 35 years, Matter of Kemp & Beatley, Inc. (64 NY2d 63 [1984]), remains the leading authority in New York on oppression-based corporate…

January 22, 2019

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January 22, 2019

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Another Reason Not to Use Fixed Price Buy-Sell Agreements

As if we need another case illustrating why fixed price buy-sell agreements should be avoided like the plague. Before we get to…

January 14, 2019

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January 14, 2019

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Business Divorce Epilogues

Over the years I’ve blogged about hundreds of court decisions in business divorce cases. Believe it or not, one of the…

January 07, 2019

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January 07, 2019

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Top Ten Business Divorce Cases of 2018

I’m very pleased to present my 11th annual list of this past year’s ten most significant business divorce cases. This year’s list…

December 31, 2018

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December 31, 2018

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Equitable Accounting vs. Access to Books and Records: Don’t Confuse Them

Raise your hand if you think that a lawsuit for an accounting by the managers of an LLC simply means they…

December 17, 2018

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December 17, 2018

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Outlawing of LLC’s Short-Term Rental Business Brings Long-Term Litigation

After two years, 300+ docket entries, and 12 motions, a lawsuit among members of a Delaware LLC that owned a…

December 10, 2018

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December 10, 2018

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IP Disputes Among Private Business Co-Owners Dominate Three Recent Cases

Last month gave us three noteworthy post-trial decisions in three different cases from three different states, all centering on disputes…

December 03, 2018

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December 03, 2018

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When Dealing in Partnership Owned Real Property, Caveat Emptor

A basic and well-known principle of partnership law is that, absent an agreement to the contrary, general partners have authority to unilaterally bind…

November 26, 2018

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November 26, 2018

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Is a Schedule K-1 By Itself Enough to Prove LLC Membership?

Let me say up front, I don’t claim to know the answer to the question posed in this post’s title, or pretend…

November 19, 2018

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November 19, 2018

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Think Twice Before Putting 100% Quorum Requirement in By-Laws or LLC Agreement

It’s no surprise that the quorum requirements found in close corporation by-laws and LLC operating agreements rarely step into the limelight…

November 12, 2018

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November 12, 2018

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A Deep Dive Into the Election to Purchase in Dissolution Proceedings

When a minority shareholder petitions for judicial dissolution under § 1104-a of the Business Corporation Law based on the majority’s alleged…

November 05, 2018

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November 05, 2018

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Accounting Unchained: Is the Closely Held Business Owner’s Right to an Accounting Absolute?

Let’s face it. In business divorce, the accounting cause of action doesn’t get a lot of love. It’s not as sexy as the…

October 29, 2018

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October 29, 2018

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Does an Inactive Member of a Member-Managed LLC Owe Fiduciary Duties?

Consider the following hypothetical: The operating agreement of an LLC vests management authority in its two members. In practice, and…

October 22, 2018

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October 22, 2018

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Inspection Rights, Oral Operating Agreements, and Other Pop-Diva Delights

Over the last several years, the books-and-records proceeding and its corresponding shareholder rights of inspection seem to have entered a…

October 15, 2018

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October 15, 2018

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Does This Decision Put the Brakes on Non-Unanimous Amendments to Operating Agreements?

Much digital ink has been spilled on this blog (here, here, here, and here) and elsewhere (Tom Rutledge’s terrific article…

October 08, 2018

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October 08, 2018

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Stock Pledge Agreement Defeats Minority Shareholder’s Standing to Sue for Statutory But Not Common-Law Dissolution

Last week, this blog wrote about a decision by Manhattan Commercial Division Justice Saliann Scarpulla in the burgeoning Yu family melee, in…

October 01, 2018

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October 01, 2018

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Judicial Dissolution and the Weaponized LLC

What’s a weaponized LLC? It’s one whose operating agreement gives the controlling majority members the authority to dilute, remove from management, or expel a non-controlling…

September 24, 2018

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September 24, 2018

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Repeat After Me: You May Not Expel a Member of a New York LLC Unless the Operating Agreement Says So

C’mon, New York lawyers, do you really want to spend your time, your client’s money, and bother the court litigating…

September 17, 2018

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September 17, 2018

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Past is Prologue: Refusal to Adopt Dividend Policy After Petitioner Resigns Not Ground for Dissolution

In the judicial dissolution case that John (“Jake”) Feldmeier brought after resigning as the highly paid president of the family-owned business, the central…

September 10, 2018

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September 10, 2018

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Basics of Valuation Proceedings – Litigating an Appraisal from Start to Finish – Part 3

This is the final installment of a three-part series about the basics of contested New York business appraisal proceedings. The first…

September 04, 2018

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September 04, 2018

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Gymnastics Business Falls Off the Beam in LLC Dissolution Case

Very few and very far between are cases in which the holder of a minority membership interest in a New York LLC — with or without…

August 27, 2018

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August 27, 2018

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LLC Dissolution Statutes Under the Microscope: Podcast Interview with Professor Douglas Moll

Douglas K. Moll, Professor of Law at the University of Houston Law Center, is well known to business divorce aficionados for…

August 20, 2018

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August 20, 2018

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Summer Shorts: Partnership Appraisal and Other Recent Decisions of Interest

The dog days of August are upon us, a perfect time as I do each year to offer vacationing readers some lighter…

August 13, 2018

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August 13, 2018

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Basics of Valuation Proceedings – Litigating an Appraisal from Start to Finish – Part 2

A few weeks ago, this blog – in the first of a three-part series about business valuation proceedings – addressed the various statutory triggers by which…

August 06, 2018

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August 06, 2018

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49% Shareholder Can’t Seek Deadlock Dissolution Despite Shareholders’ Agreement Granting Co-Equal Control

Shareholders A and B are the sole shareholders of a real estate holding corporation. Their shareholders’ agreement includes provisions that: guarantee each…

July 30, 2018

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July 30, 2018

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Dissension Follows When Business Owners Don’t Put Their IP House in Order

When you think about protecting a business firm’s intellectual property (IP), usually you think about protecting it from infringement by external actors. But there also…

July 23, 2018

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July 23, 2018

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Dead Men Tell No Tales of Shareholder Buy-Outs Gone Sour

When three gentlemen in their mid-eighties, one of whom is in a nursing home with failing health and onset dementia, are the key…

July 16, 2018

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July 16, 2018

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Basics of Valuation Proceedings – Litigating an Appraisal from Start to Finish – Part 1

Last month, seasoned business appraiser Andy Ross of Getty Marcus CPA, P.C., and I made a presentation at the Nassau…

July 09, 2018

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July 09, 2018

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Lessons From a Trio of Dysfunctional Buy-Sell Agreements

Three recent court decisions from three different states — New York, Pennsylvania, and Alabama — add to the rogue’s gallery…

July 02, 2018

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July 02, 2018

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Court Denies Second Bite at Dissolution Cherry in Kassab Brothers Business Divorce

The hard-fought business divorce litigation between Nissim Kassab and his brother Avraham has provided plenty of fodder for this blog over the last…

June 25, 2018

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June 25, 2018

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You Sued for Dissolution, They Elected to Buy You Out, What Else Do You Want?

Article 11 of the Business Corporation Law features multiple provisions giving judges broad authority and discretion to impose interim remedies designed to preserve corporate…

June 18, 2018

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June 18, 2018

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A Trip Down Business Divorce Lane with Recently Retired Justice Shirley Werner Kornreich

With a genuine sense of loss, we bid adieu to Manhattan Commercial Division Justice Shirley Werner Kornreich, who retired at the…

June 11, 2018

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June 11, 2018

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Bona Fide Purchaser Avoids Rescission of Minority Shareholder’s Unauthorized Sale of Corporation’s Realty

The Lowbet Realty saga, featuring the dissolution court’s rarely used authority to rescind an unauthorized sale of the corporation’s realty under Business Corporation Law…

June 04, 2018

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June 04, 2018

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Anyone Think Binding Mediation to Break Deadlock Is a Good Idea?

Mediation, as commonly understood in the context of alternative dispute resolution, employs a neutral third party to facilitate negotiation and voluntary agreement between the parties. Unlike arbitration, the…

May 29, 2018

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May 29, 2018

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No Prize for Nobel Laureate in Fight for Bigger Stake in Biotech Company

The Nobel Prize symbolizes the apex of human achievement in the arts and sciences. It is no guarantee, however, that…

May 21, 2018

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May 21, 2018

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Corporate Frankenstein “Partnership to Form a Corporation” Lives Another Day

Lawyers are famous for arguing seemingly inconsistent positions at the same time. We practitioners lovingly refer to the technique as “arguing in the alternative.” The…

May 14, 2018

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May 14, 2018

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If LLC Agreement Must Be in Writing, Must it Be Signed?

Transactional lawyers who assist clients in the formation and restructuring of business entities, and the litigators who clean up the transactional…

May 07, 2018

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May 07, 2018

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Court Grants 50% LLC Member Derivative Right to Defend Action Brought by Other 50% Member’s Solely Owned Company

You know there’s something unusual going on in a case involving a dispute between co-members of an LLC — a form of…

April 30, 2018

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April 30, 2018

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Can LLC Agreement Waive Right to Sue Derivatively? Not in These Two Cases

Recently, in two separate cases, two New York judges construing two LLC agreements of two LLCs formed under the laws of two…

April 23, 2018

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April 23, 2018

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Operating Agreement Dooms Derivative Claims by Deceased LLC Member’s Estate

In business divorce litigation, petitioners / plaintiffs often want to start the case with a bang. A common tactic is to file a petition…

April 16, 2018

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April 16, 2018

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Shareholder Oppression Requires More Than Denial of Access to Company Information

“We are poster-boys for why family members should not go into business together.” So says respondent Paul Vaccari in his…

April 09, 2018

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April 09, 2018

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New York’s High Court Takes Fresh Approach to Wrongful Dissolution, Sustains Valuation Discounts, Limits Damages in Partnership Case

There’s a lot to digest in last week’s decision by the Court of Appeals — New York’s highest court —…

April 02, 2018

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April 02, 2018

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You Dissented From a Merger. Are You Bound by Your Non-Compete?

New York’s business-entity statutes, like those across the nation, provide minority owners with the right to dissent from a merger…

March 26, 2018

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March 26, 2018

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The Cash-Out Merger Solution to the Problem Minority Owner

How can majority business owners legally rid themselves of a problematic minority owner? Not by transferring the business’s assets to another entity for no consideration. That…

March 19, 2018

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March 19, 2018

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Appeals Court Reinstates Derivative Claims Dismissed for Conflict of Interest Where Parties’ Relationship Not “Especially Acrimonious”

Almost always there are elements of acrimony and intense emotion in litigation between co-owners of closely held business entities. The degree…

March 12, 2018

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March 12, 2018

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One 50% Shareholder Wants to Sell or Liquidate the Business. The Other Wants to Keep It Going. Is That Deadlock?

We call it deadlock dissolution when a 50% shareholder of a close corporation, who claims to be at an impasse…

March 05, 2018

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March 05, 2018

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LLC Member Expulsion: What Hath Shapiro Wrought?

Unlike the LLC statutes in many other states, New York’s LLC Law does not authorize the LLC or any of its members…

February 26, 2018

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February 26, 2018

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The LLC Equitable Buyout: Past, Present, Future

Under the right set of facts, New York courts occasionally find remedies for LLC owners not explicitly authorized in the Limited Liability Company Law (“LLC…

February 19, 2018

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February 19, 2018

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Will Someone Please Re-Name the Implied Covenant of Good Faith and Fair Dealing?

In the annals of business divorce litigation and assorted other disputes between co-owners of closely held business entities, the cause of…

February 12, 2018

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February 12, 2018

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The Purposeless Purpose Clause Makes a Comeback — Or Does It?

The test for judicial dissolution of LLCs under LLC Law § 702, as laid down in 1545 Ocean Avenue, initially asks whether the…

February 05, 2018

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February 05, 2018

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Confessions of a Business Appraiser: A Conversation with Chris Mercer

Business valuation contests in court, including those arising out of shareholder and partnership disputes, inevitably boil down to a battle of the appraisal…

January 29, 2018

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January 29, 2018

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Rare Partnership Dissolution Decision Applies Deadlock Standard to Dissolution Under Partnership Law

As LLCs have become the dominant form of closely-held business in New York, cases involving dissolution of partnerships have become more and more rare. Section…

January 22, 2018

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January 22, 2018

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Delaware Chancery Court Rulings Address Valuation and Insolvency Disputes

The steady flow and scholarly character of Delaware Chancery Court opinions in company valuation contests provide an important resource and learning tool for…

January 15, 2018

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January 15, 2018

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Winter Case Notes: LLC Deadlock and Other Recent Decisions of Interest

This winter forever will be remembered in the Northeast as the winter of the “bomb cyclone,” which gets credit for the 6º temperature and…

January 08, 2018

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January 08, 2018

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Top 10 Business Divorce Cases of 2017

I’m delighted to present my 10th annual list of this past year’s ten most significant business divorce cases. This year’s list includes seven noteworthy…

January 02, 2018

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January 02, 2018

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Delaware Contractarian Principles Prevail in Appeal Over Deceased Ace Hotel Founder’s LLC Interest

The sudden death of Alexander Calderwood, the brilliant but troubled co-founder of the Ace brand of hotels, resulted in some fierce…

December 26, 2017

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December 26, 2017

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A River’s Divide: Time for the Manhattan and Brooklyn Appellate Courts to Agree on Marketability Discount in Fair Value Proceedings

The East River and roughly five miles as the pigeon flies separate the equally beautiful courthouses of the Appellate Division, Second…

December 18, 2017

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December 18, 2017

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Operating Agreement Defeats Statutory Buyout Rights Upon LLC Member’s Withdrawal

When the tsunami of LLC enabling statutes swept the U.S. in the late ’80s and early ’90s, including New York in 1994, many included a…

December 11, 2017

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December 11, 2017

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Reflections on Ten Years of Blogging

This week marks the tenth anniversary of the launch of this blog. Every Monday morning since, come hell, high water,…

December 04, 2017

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December 04, 2017

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Surrogate’s Court Declines to Order Demise of Fashion Business

When you want to sue to dissolve a business in New York on behalf of the estate of a deceased…

November 27, 2017

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November 27, 2017

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Can the Bare Naked Assignee Demand Access to LLC Records?

I wish I could take credit for it, but I can’t. The phrase “bare naked assignee” was coined by the preeminent…

November 20, 2017

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November 20, 2017

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The (Even More) Elusive Surcharge in Dissolution Proceedings

A year ago I wrote a piece called The Elusive Surcharge in Dissolution Proceedings highlighting the rare appearance in the…

November 13, 2017

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November 13, 2017

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Divorcing Husband Not Smiling Over Court’s Rejection of Ownership Interest in Wife’s Dental Practice

The self-proclaimed entrepreneur and guiding force behind his soon-to-be ex-wife’s highly successful, multi-office pediatric dental practice known as Kiddsmiles is not smiling after the court…

November 06, 2017

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November 06, 2017

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“Where’s the Beef?” Says Appeals Court, Reversing LLC Dissolution

A dissolution petitioner received the judicial equivalent of the old quip “Where’s the beef?” in a Brooklyn appeals court decision last…

October 30, 2017

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October 30, 2017

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Calling an Organization a Partnership Doesn’t Make it One, But Not Calling it a Partnership Doesn’t Make it Not One. Got It?

Did you know there’s such a thing as an “inadvertent partnership”? The basic definition of a partnership, under both the…

October 23, 2017

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October 23, 2017

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A Member By Any Other Name . . . May Have Access to LLC Books and Records

I’ve seen LLC operating agreements ranging from one page to over 100. Usually there’s a direct relationship between the length of the agreement and the…

October 16, 2017

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October 16, 2017

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Court Defines “True Deadlock”

Minority shareholder oppression and deadlock are the twin pillars of most business divorce litigation. Both are codified in the vast…

October 09, 2017

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October 09, 2017

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LLC’s Purpose Being Achieved? Business Doing Fine? Good Luck Getting Judicial Dissolution

New York’s LLC judicial dissolution statute, Section 702 of the Limited Liability Company Law, provides far more limited grounds to dissolve a business than the Business Corporation…

October 02, 2017

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October 02, 2017

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Read This Case. Slap Your Head. Not Too Hard.

Having read thousands of court opinions during my 30+ years as a litigator, I’ve learned to assume that there are things going…

September 25, 2017

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September 25, 2017

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Don’t Let the Deal Get Ahead of the Documents

The practical lesson for entrepreneurs of the case I’m about to describe is, never sign complex business agreements without your lawyer,…

September 18, 2017

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September 18, 2017

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Business Divorce Stories: Podcast Interviews with Business Appraiser Tony Cotrupe and Attorney Jeffrey Eilender

If you haven’t yet listened to prior episodes of the Business Divorce Roundtable (a) it’s time you did and (b)…

September 11, 2017

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September 11, 2017

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Superstorm Sandy Unable to Wash Away Sin of Contempt

As many judges and lawyers know, Superstorm Sandy has been used in litigation over the years as an excuse for…

September 05, 2017

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September 05, 2017

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Summer Shorts: Three Must-Read Decisions

Regular readers of this blog know it’s been anything but summer doldrums in the world of business divorce, what with case law developments such…

August 28, 2017

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August 28, 2017

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Does Your LLC Agreement Have a Purposeless Purpose Clause?

WARNING: Contractarians may find the following post disturbing. Reader discretion is advised. Now that I’ve got your attention, consider this:…

August 21, 2017

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August 21, 2017

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And the Award For Most Oppressive Conduct By a Majority Shareholder Goes to . . .

Over the years I’ve litigated and observed countless cases of alleged oppression of minority shareholders by the majority. Oppression can take endlessly different forms, some…

August 14, 2017

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August 14, 2017

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Navigating Rocky Shoals and Safe Harbors When Board Members Fix Their Own Compensation

Board members’ decisions to award compensation packages for themselves can present some thorny issues. In a close corporation, shareholders typically…

August 07, 2017

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August 07, 2017

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Books and Records Case Illustrates Crucial Importance of Pre-Suit Demand

The third time definitely wasn’t a charm for the plaintiff in Austin v Gould, 2017 NY Slip Op 31494(U) [Sup Ct…

July 31, 2017

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July 31, 2017

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It’s a Partnership! No, It’s an LLC! No, It’s Both!

In 1981, three partners formed a general partnership to own and operate a rental property. Their partnership agreement fixed a 30-year term, to…

July 24, 2017

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July 24, 2017

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Interview With Justice Carolyn Demarest (Ret.) on Litigating and Mediating Business Divorce Cases

During her many years as Presiding Justice of the Brooklyn Commercial Division, New York Supreme Court Justice Carolyn E. Demarest (Ret.)…

July 17, 2017

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July 17, 2017

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Minority Shareholders’ Derivative Suit Foiled by Voiding of Corporation’s Charter for Nonpayment of Taxes

A business’s failure to pay state taxes can be a problem if the entity later wants to bring a lawsuit, or…

July 10, 2017

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July 10, 2017

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In Dispute Over Partnership’s Conversion to LLC, Court Finds No Duty to “Spoon-Feed” Sophisticated Investor

Pay attention to your K-1s or they may come back to bite you, is the lesson of Bruder v Hillman, Docket No.…

July 03, 2017

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July 03, 2017

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Appraisers’ Valuations Are Light-Years Apart, But Does That Make Them Hired Guns?

The title of this post notwithstanding, the judge’s decision in the recent, high-stakes stock valuation case I’m about to describe, featuring a clash of…

June 26, 2017

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June 26, 2017

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Then There Were Two: Court Rejects Minority Shareholder’s Claim of Wrongful Termination Under Founders Agreement

Wanted: Business Divorce Stories Are you a business owner who’s been through a contentious break-up with your business partners and…

June 19, 2017

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June 19, 2017

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Federal Court No Mecca for Business Divorce Litigants

Civil litigation in federal court can be a luxury experience. The quality of the judiciary is superb. Federal judges often…

June 12, 2017

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June 12, 2017

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Finding No “Therapeutic” Benefit to Corporation, Court Denies Fee Award in Discontinued Shareholder Derivative Action

At first glance, you might think the plaintiff minority shareholder in Sardis v Sardis, 2017 NY Slip Op 27163 [Sup Ct…

June 05, 2017

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June 05, 2017

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“Food Fight” Sequel Ends Badly for Ousted Sibling

A little over three years ago I reported on the first round of a fascinating “food fight” among four siblings, each…

May 30, 2017

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May 30, 2017

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Delaware Ruling Highlights Difference With New York Over Amending LLC Agreements

The common perception among practitioners familiar with the business entity laws of New York and Delaware is that Delaware law…

May 22, 2017

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May 22, 2017

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Assignment of LLC Interest Defeats Standing Despite Alleged Lack of Consideration

The rules of “standing” in business divorce litigation generally require that the plaintiff have an ownership interest in the business entity at the time of the…

May 15, 2017

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May 15, 2017

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Aim Carefully Before Pulling Trigger on Shotgun Buy-Sell Agreement

At least on paper, shotgun provisions in shareholder and operating agreements provide an elegant and efficient buy-out solution when business owners…

May 08, 2017

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May 08, 2017

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Suing on Behalf of People You’re Suing Can Sink a Derivative Lawsuit — Especially If You Have a Litigious Nature

The U.S. reportedly has the world’s highest number of lawyers per capita (1 for every 300 people) and the 5th highest…

May 01, 2017

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May 01, 2017

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Forensic Analyses in Valuation: Interview With Jaime d’Almeida of Duff & Phelps

Forensics means different things to different people in different contexts. But what does it mean in the context of valuing…

April 24, 2017

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April 24, 2017

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Withdraw a Dissolution Claim? Not So Fast

Article 11 of the Business Corporation Law governs dissolution of closely held New York business corporations. Article 11 has existed, more…

April 17, 2017

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April 17, 2017

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Business Divorce Nation: Five States, Five Cases

It’s true that the statutory and common-law rules at play in business divorce cases can vary widely from state to…

April 10, 2017

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April 10, 2017

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Beware Diversity Trap in Federal Court Business Divorce Cases Involving LLCs

I can count on one hand the number of federal court cases I’ve featured on this blog since I started it almost 10 years…

April 03, 2017

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April 03, 2017

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A Pair of Unbrotherly Business Altercations Go to Trial

Like most civil cases, the vast majority of business divorce disputes get resolved before trial, which is disappointing for us voyeurs…

March 27, 2017

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March 27, 2017

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When Love and Business Fails

When a romantic affair evolves into a business relationship, the eventual falling out can be especially messy. Even more so…

March 20, 2017

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March 20, 2017

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Has New Jersey Gone Off Its DLOM Rocker?

Whenever I contemplate New York’s unusual case law on the discount for lack of marketability (DLOM) in statutory fair value buy-out proceedings, I cast my…

March 13, 2017

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March 13, 2017

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Mediating Business Valuation Disputes

Mediation continues to grow in popularity as a means of resolving legal disputes in lockstep with the rising costs and delays…

March 06, 2017

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March 06, 2017

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Business Appraisers Spar Over Tax Rates, Market Approach and Other Key Issues in Fair Value Buy-Out Case

As promised in the postscript to last week’s post about the appellate ruling in the Gould case, affirming Justice Platkin’s…

February 27, 2017

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February 27, 2017

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An Oppression How-To: Revoke Employment, Profit Sharing and Control

An earlier post on this blog, examining a post-trial decision in Matter of Digeser v Flach, 2015 NY Slip Op 51609(U) [Sup Ct…

February 20, 2017

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February 20, 2017

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Race to the Exit as Professional Practice Falters

Does a shareholder have a fiduciary duty not to exercise a contractual right under the shareholders’ agreement to resign and demand a…

February 13, 2017

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February 13, 2017

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Winter Case Notes: De Facto Partnership and Other Recent Decisions of Interest

Welcome to another edition of Winter Case Notes in which I clear out my backlog of recent court decisions of interest to…

February 06, 2017

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February 06, 2017

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Thinking About Becoming a Minority Member of a New York LLC Without an Operating Agreement? Think Again

An appellate decision last week sounds alarm bells for minority members of New York LLCs that have no operating agreement and for…

January 30, 2017

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January 30, 2017

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Operating Agreement Trumps Falsified Liquor License Application In Dispute Over LLC Membership

Oh, the things that can happen when the LLC members identified in the company’s operating agreement differ from those identified in…

January 23, 2017

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January 23, 2017

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Court of Appeals to Decide Controversial Partnership Dissolution Case

In a controversial ruling last year in Congel v Malfitano, the Appellate Division, Second Department, affirmed and modified in part…

January 16, 2017

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January 16, 2017

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Announcing Must-Have Treatise on Business Divorce Litigation

There’s little doubt in my mind that “business divorce” has achieved name recognition as a distinct subgenre of commercial litigation whose regular practitioners,…

January 09, 2017

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January 09, 2017

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Limited Partners Take a Licking in Two Delaware Supreme Court Decisions

Notwithstanding the ascendency of the limited liability company, the Delaware limited partnership continues to serve as an important, tax-advantaged vehicle for…

January 02, 2017

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January 02, 2017

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Top 10 Business Divorce Cases of 2016

I’m pleased to present my 9th annual list of this past year’s ten most significant business divorce cases. The list includes important appellate rulings…

December 26, 2016

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December 26, 2016

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Sole Owners of Close Corporation and LLC Discover They’re Not So Sole

What makes a shareholder a shareholder? What makes an LLC member a member? The simplicity of the questions belies the…

December 19, 2016

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December 19, 2016

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Marketability Discount Revisited: Interview With Greg Barber

Yet another voice, that of Greg Barber, CFA, of Barber Analytics in San Francisco, has joined the growing debate in business valuation and legal…

December 12, 2016

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December 12, 2016

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Another Frozen-Out Minority LLC Member’s Petition for Dissolution Bites the . . . Sushi?

The Japanese word “omakase” translates as “I’ll Ieave it up to you” and is used by patrons of sushi restaurants to leave the…

December 05, 2016

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December 05, 2016

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She’s a Tie-Breaker, She’s a Risk Taker

[N.B. Younger readers of this post may be forgiven for not catching the title’s play on the refrain of a certain…

November 28, 2016

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November 28, 2016

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Articles & Advisories

Business Divorce Cases of 2018

In recent years, most of the new and noteworthy case law developments in the business divorce field predictably have involved…

February 26, 2019

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Selling Your Business: Baskets, Deductibles and Caps, Oh My!

By Lyle C. Mahler You’re a business owner and have spent years nurturing and growing your business into a valuable asset,…

May 09, 2018

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THE NEW TAX LAW: What Businesses Can Expect

The question we hear most from domestic business owners about the TCJA is, “How much will IRC Section 199A 20…

May 09, 2018

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Business Divorce Cases of 2017 Focus On Oppression, Valuation and LLC Issues

New York courts last year decided an impressive array of business divorce cases involving closely held corporations, partnerships, and limited…

February 16, 2018

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Court Address Key Issues In Business Divorce Cases of 2016

Last year New York courts decided a number of important cases involving business divorce and related litigation between co-owners of…

February 15, 2017

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LLCs Dominate Business Divorce Cases of 2015

It’s been over 20 years since legislatures in New York and across the nation gave birth to the limited liability…

February 01, 2016

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Complex Questions Addressed In Business Divorce Cases of 2014

Reprinted with permission from New York Law Journal, Volume 253-No. 35, February 24, 2015 issue.   In the annals of…

February 25, 2015

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Kornreich Reaffirms Skepticism Toward Marketability Discounts

In the January 5th issue of the Commercial Litigation Insider Peter Mahler was quoted in an article on the Zelouf…

January 07, 2015

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Business Divorce Cases of 2013 Include Important Appellate Rulings

February 10, 2014

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Outside Counsel: Annual Review of Business Divorce Cases in 2012

February 14, 2013

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News

Boom time ahead for Long Island?

Louis Vlahos, partner, who leads the Farrell Fritz tax practice group is quoted in this article. Tax reform, Wayfair case and…

August 01, 2018

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To C or Not to C?

Louis Vlahos, partner at Farrell Fritz is mentioned in this article. C-Corp offers tax treasures and traps as new code…

July 09, 2018

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Millennial Lawyers Explain Why They Flock to New York’s Midsize Firms

January 18, 2018

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LexBlog Leaders: Peter Mahler Builds an Engine with Zeal

Peter Mahler discusses his impetus for launching the New York Business Divorce blog, how it has contributed to his business success…

September 12, 2016

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Understanding the Specifics of a Business Divorce

Breaking up is hard to do, so Uniondale-based law firm Farrell Fritz has set up a practice group to make…

June 30, 2016

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Farrell Fritz Counsels Disputing Partners with Business Divorce Practice Group

The attached advertorial, published in the May 27, 2016 issue of Long Island Business News, discusses the launch of Farrell Fritz’s…

June 02, 2016

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Press Releases

Farrell Fritz Launches Business Divorce Practice Group

Farrell Fritz is pleased to announce the launch of the firm’s Business Divorce practice group. Led by Peter A. Mahler,…

June 06, 2016

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Farrell Fritz’s New York Business Divorce Blog Chosen as an ABA Journal Blawg 100 Honoree

Farrell Fritz is pleased to announce that the firm’s New York Business Divorce blog, authored by Peter A. Mahler, was…

November 25, 2015

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30 Farrell Fritz Attorneys Recognized as 2015 Leading Lawyers in their Respective Areas of Practice

Farrell Fritz had a combined total of 30 attorneys selected to the 2015 New York Super Lawyers and New York…

September 16, 2015

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30 Farrell Fritz Attorneys Recognized as 2014 Leading Lawyers in their Respective Areas of Practice

Farrell Fritz had a combined total of 30 attorneys named to the 2014 New York Super Lawyers and New York…

September 23, 2014

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