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Stock Redemption Agreement Forecloses Seller’s Suit for Tax Liability on...
I’ve written before (here and here) about the need to address potential tax liability of the selling shareholder on ”phantom” income, i.e., undistributed net income allocated to the shareholder on his...
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Court in Law Firm Dissolution Suit Must Decide, Was Partnership a “Sham”?
A disproportionate number of court decisions applying New York’s Partnership Law involve law firm partnerships. That’s because, while use of general partnerships in the business world at large has been...
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A Boost for Books-and-Records Proceedings
Pity the poor books-and-records proceeding. Misunderstood. Neglected. Widely viewed among New York practitioners as an ineffective use of time and resources. Jealous cousin to its wildly popular...
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Negotiating a Buyout? Don’t Overlook Taxes on Phantom Income
Think of it this way: At every negotiation of a shareholder buyout involving an S corporation or other passthrough entity, there are three parties at the table — the seller, the buyer, and the IRS. Why...
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LLC Subscription Agreement No Bar to Transfer of Membership Interest
A Manhattan appellate panel’s two-page decision in Gartner v Cardio Ventures, LLC, 2014 NY Slip Op 07423 [1st Dept Oct. 30, 2014], offers a dry account of a disputed transfer of an LLC membership...
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Court Declines Jurisdiction Over Claim for Common-Law Dissolution of Delaware...
“[T]he Court concludes that it lacks subject-matter jurisdiction to dissolve a Delaware corporation, and thus dismisses the First Cause of Action.” Sounds familiar? It should. The above ruling, found...
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Another Case of Seller’s Remorse Bites the Dust
A Manhattan appellate panel’s unanimous decision last week in Brummer v Red Rabbit, LLC, 2015 NY Slip Op 02912 [1st Dept April 7, 2015], affirmed the dismissal of an LLC member’s claims for fraud and...
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Oppression Claims Don’t Cut It in LLC Dissolution Cases
For the second time, a unanimous panel of the Manhattan-based Appellate Division, First Department, has upheld the pretrial dismissal of an action for judicial dissolution of a limited liability...
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Wash Hands Before Suing
Judicial dissolution of a business entity, whether pursuant to statute or common law, is an equitable remedy subject to equitable defenses, including the doctrine of “unclean hands.” As described a few...
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Summer Shorts: Member Expulsion and Other Recent Decisions of Interest
Traditions are good. This blog has two annual traditions. First, at the end of each year I write a post listing the year’s top ten business divorce decisions. Second, each August I offer readers who...
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