Posts Categorized: Corporations

Posted: September 26, 2018

Business Judgment Rule Applies to Allegations of Board’s Incompetence

On August 22, 2018, the New Jersey Appellate Division issued a decision in Alloco v. Ocean Beach and Bay Club, Docket No. A-0922-16T3, holding that the business judgment rule protects a board from allegations of incompetence, explaining: Plaintiffs also argue that the Board and its rules are incompetent. However, showing Board members or their rules… Read more »

Posted: December 22, 2017

General Provisions of Delaware LLC Law Do Not Trump Specific Provisions of LLC Agreement

On December 14, 2017, the First Department issued a decision in Estate of Calderwood v. ACE Group International LLC, 2017 NY Slip Op. 08750, holding that the general provisions of the Delaware law limited liability company regarding personal representatives did not trump the specific provisions of an LLC agreement, explaining: According to defendants, under the… Read more »

Posted: September 17, 2017

Manager of Delaware LLC Must Exercise Rights Granted to it in Good Faith

On September 8, 2017, Justice Scarpulla of the New York County Commercial Division issued a decision in Marbo Holdings Corp. v. Fulton Capitol, LLC, 2017 NY Slip Op. 31912(U), holding that even where an LLC manager is given discretion to act for its own benefit, it still must exercise that discretion in good faith, explaining:… Read more »

Posted: August 4, 2017

Request for Indemnification Under BCL Denied on Procedural Grounds

On July 13, 2017, Justice Emerson of the Suffolk County Commercial Division issued a decision in Federico v. Brancato, 2017 NY Slip Op 50968(U), denying a request for indemnification under the Business Corporation Law on procedural grounds. First, the court reviewed the legal framework for the indemnification of officers and directors under the BCL: Business… Read more »

Posted: February 7, 2017

First Department Expands Factors Governing Approval of Nonmonetary Class Action Settlements

On February 2, 2017, the First Department issued a decision in Gordon v. Verizon Communications, Inc., 2017 NY Slip Op. 00742, expanding the list of factors governing approval of nonmonetary factors governing approval of nonmonetary class action settlements. Gordon involved a nonmonetary class action settlement. As the First Department explained: The rise of nonmonetary class… Read more »

Posted: January 4, 2017

Absent Fraud, Board’s Judgment as to Value of Consideration Received for Shares is Conclusive

On December 28, 2016, the Second Department issued a decision in KNET, Inc. v. Ruocco, 2016 NY Slip Op. 08853, reversing a grant of summary judgment and holding that there were questions of fact regarding whether a board’s issue of shares was improper, explaining: The court invalidated all but 500,000 of the shares of Interceptor… Read more »

Posted: October 19, 2016

Shareholders Had Common-Law Right to Inspect Books and Records of Corporate Subsidiary

On October 11, 2016, the First Department issued a decision in Matter of Pokoik v. 575 Realties, Inc., 2016 NY Slip Op. 06648, holding that shareholders had a common-law right to inspect the books and records of a subsidiary, explaining: Under New York law, shareholders have both statutory and common-law rights to inspect a corporation’s… Read more »

Posted: August 29, 2016

When Corporate Dissolution is Annulled it Retroactively Validates Contracts

On August 19, 2016, Justice Kornreich of the New York County Commercial Division issued a decision in 115 W. 27th St. Associates LLC v. Perez, 2016 NY Slip Op. 31588(U), holding that a corporate officer that conducted business in the name of the corporation after it was dissolved was shielded from liability by annulling the… Read more »