Monthly Archives: November 2016

Posted: November 30, 2016

Board Did Not Breach Fiduciary Duty By Entering Into Management Contract With Former Employees

On November 22, 2016, the First Department issued a decision in Doppelt v. Denahan, 2016 NY Slip Op. 07868, holding that directors did not breach their fiduciary duty by entering into a management contract with former employees, explaining: Contrary to the argument advanced by plaintiff, a shareholder who seeks to bring a derivative action on… Read more »

Posted: November 27, 2016

Party Who Agreed to Be Tie-Breaker Vote for LLC Members Had Fiduciary Duty to Members

On November 21, 2016, Justice Ritholtz of the Queens County Commercial Division issued a decision in Fakiris v. Gusmar Enterprises, LLC, 2016 NY Slip Op. 51665(U), holding that a person who had agreed to be the tie-breaker in votes between two LLC members had a fiduciary duty to those members, explaining: The second cause of… Read more »

Posted: November 26, 2016

Warranty of Habitability Does Not Include Right to Create Additional Habitable Space

On November 22, 2016, the First Department issued a decision in Seigel v. Dakota, Inc., 2016 NY Slip Op. 07850, holding that the warranty of habitability does not include the right to create additional habitable space. In Seigel, the plaintiff “purchased shares in defendant cooperative corporation and entered into a proprietary lease for the occupancy… Read more »

Posted: November 25, 2016

Transcripts and Videos of Arguments in the Court of Appeals for November 2016 Now Available

On November 7, 2016, we noted a case of interest from the oral arguments before the Court of Appeals in November 2016: Stonehill Capital Management, LLC v. Bank of the West (Case No. 191) (argued on Monday, November 14, 2016) (“Contracts–Formation of contracts–Offer and acceptance–Whether defendant bank clearly and unequivocally accepted plaintiffs’ offer to purchase… Read more »

Posted: November 24, 2016

Personal Jurisdiction Found Based on Use of New York Correspondent Banks to Launder Funds

On November 22, 2016, the Court of Appeals issued a decision in Rushaid v. Pictet & Cie, 2016 NY Slip Op. 07834, holding “that defendants’ intentional and repeated use of New York correspondent bank accounts to launder their customers’ illegally obtained funds constitutes purposeful transaction of business substantially related to plaintiffs’ claims, thus conferring personal… Read more »

Posted: November 23, 2016

Former Employees Can be Ordered to Repay Salaries under Faithless Servant Doctrine

On November 22, 2016, the First Department issued a decision in Beach v. Touradji Capital Management, LP, 2016 NY Slip Op. 07852, holding that former employees that formed a competing company could be held liable for breach of fiduciary duty, explaining: Although plaintiffs were at-will employees, they could be found to have breached a fiduciary… Read more »

Posted: November 22, 2016

RMBS Fraud Claims Upheld; Plaintiff Was Justified in Relying on Misrepresentations

On November 17, 2016, the First Department issued a decision in Phoenix Light SF Ltd. v. Credit Suisse AG, 2016 NY Slip Op. 07757, reversing the dismissal of RMBS fraud claims, explaining: The allegations that with respect to their purchase of residential mortgaged-back securities plaintiffs relied on misrepresentations and omissions made by defendants in the… Read more »

Posted: November 21, 2016

Failure to Give Notice and Opportunity to Defend Fatal to Indemnification Claim

On November 17, 2016, the First Department issued a decision in Conergics Corp. v. Dearborn Mid-West Conveyor Co., 2016 NY Slip Op. 07750, holding that failure to give notice and an opportunity to defend an action was fatal to a plaintiff’s demand for indemnification. In Conergics Corp., the parties entered into a stock purchase agreement… Read more »