Posts Categorized: Corporations

Posted: December 26, 2020

Restrictions on Stock Transfer in Corporate By-Laws Did Not Bar Transfer By Will

On December 11, 2020, Justice Emerson of the Suffolk County Commercial Division issued a decision in Lambro Indus., Inc. v. Chai Found., Inc., 2020 NY Slip Op. 51470(U), holding that restrictions on stock transfers in corporate by-laws did not bar the transfer of stock by will, explaining: As a broad general principle, it may be... Read more »

Posted: February 16, 2020

Deceased Partner’s Estate Does Not Have Standing to Seek Limited Partnership’s Dissolution

On February 5, 2020, Justice Borrok of the New York County Commercial Division issued a decision in Weinstein v RAS Prop. Mgt. LLC, 2020 NY Slip Op. 20028, holding that a deceased partner’s estate did not have standing to seek the partnership’s dissolution, explaining: In support of their position, the respondents rely on Salter v... Read more »

Posted: January 2, 2020

Corporate Officer May be Held Liable for Corporation’s Tort in Which the Officer Participated

On December 20, 2019, the Fourth Department issued a decision in Canandaigua Natl. Bank & Trust Co. v. Acquest S. Park, LLC, 2019 NY Slip Op. 09130, holding that a corporate officer may be held liable for a corporation’s tort in which the officer participated, explaining: The sole contention raised by Huntress in support of... Read more »

Posted: September 20, 2019

Shareholder Agreement Provision Requiring Shareholders and Corporation to Agree on Shareholder’s Compensation Unenforceably Vague

On September 11, 2019, the Second Department issued a decision in Osborne v. Williamson Law Book Co., 2019 NY Slip Op. 06503, holding that a shareholder agreement provision requiring shareholders and the corporation to agree on the shareholder’s compensation for working for the corporation was unenforceably vague, explaining: A contract is to be construed in... Read more »

Posted: February 26, 2019

Dissolved Corporation Can Bring Claim as Part of its Winding Up

On February 8, 2019, Justice Borrok of the New York County Commercial Division issued a decision in A&B Deli Inc. v. 251 Sixth Ave., LLC, 2019 NY Slip Op. 30289(U), holding that a dissolved corporation could bring a claim as part of its winding up, explaining: The Defendant argues that the action must be dismissed... Read more »

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 »