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Posts Categorized: Corporations

Posted: January 29, 2014

Board Did Not Have Fiduciary Duty to Maximize Shareholder Benefit in Merger Where There was No Change of Control or Break-up

On January 13, 2014, Justice Friedman of the New York County Commercial Division issued a decision in Badowski v. Carrao, 2014 NY Slip Op. 50042(U), dismissing breach of fiduciary claims relating to a merger. In Badowski, the class action plaintiff alleged that the individual defendants, the former directors and officers of Vertro, Inc. (Vertro), breached their... Read more »

Posted: January 23, 2014

Director Breaches Fiducary Duty in Selling Corporate Shares to Himself

On December 24, 2013, Justice Whelan of the Suffolk County Commercial Division issued a decision in KNET, Inc. v. Ruocco, 2013 NY Slip Op. 33543(U), addressing the propriety of a director’s sale of additional shares to himself. In KNET, Inc., the court addressed a number of issues, including whether a corporate director breached his fiduciary... Read more »

Posted: January 12, 2014

Derivative Claim Dismissed for Failure to Allege Demand Futility with Particularity

On January 6, 2014, Justice Bransten of the New York County Commercial Division issued a decision in Zacharius v. Kensington Publishing Corp., 2014 NY Slip Op. 50011(U), addressing a number of business divorce issues, including the standard for pleading demand futility. Zacharius involved a dispute between shareholders in a closely held corporation. The court’s decision in... Read more »

Posted: January 4, 2014

Appropriate Vehicle to Address Grievances In Two-Shareholder Corporations is Derivative Action

On December 20, 2013, Justice Demarest of the Kings County Commercial Division issued a decision in Machaneinu, Inc. v. Luria, 2013 NY Slip Op. 52197(U), concluding that a 50 percent shareholder of a not-for-profit corporation lacked authority to initiate a direct action on behalf of the corporation against the other 50 percent shareholder for breach... Read more »

Posted: December 31, 2013

Default Judgment Against Corporation in Favor of its Sole Employee Vacated

On December 4, 2013, Justice Schweitzer of the New York County Commercial Division issued a decision in Karian v. Physician’s Choice, Inc., 2013 NY Slip Op. 33219(U), where the president and sole employee of a corporation sued the corporation and caused it to default. In Karian, plaintiff was the “president and sole employee” of the... Read more »

Posted: November 18, 2013

Gross Negligence Claim Dismissed Based on Business Judgment Rule and Lack of Damages

On November 12, 2013, Justice Bransten of the New York County Commercial Division issued a decision in Phillips v. Hoffman, 2013 NY Slip Op. 51836(U), granting summary judgment and dismissing a gross negligence claim filed by a pro se plaintiff against a hedge fund manager who she claimed had mismanaged her money. Justice Bransten dismissed the... Read more »