Attorney John M. Cunningham

02/07/2023

A new post in the excellent blawg of Farrell Fritz provides an excellent summary of the New York caselaw on the important issue whether minority members of multi-member LLCs may owe fiduciary duties to other members and to the LLC.

In this week's New York Business Divorce, read about a new decision from New York County Commercial Division Justice Andrea J. Masley addressing an important, unresolved question of New York law: whether, and if so, to what extent, do minority LLC members owe fiduciary duties?

12/20/2022

The latest post by the Farrell Fritz law firm in its excellent website entitled “Business Divorce” is about how to handle the removal of LLC managers.

Combine a business divorce with a marital divorce and what do you get? Find out in this week's New York Business Divorce.

12/13/2022

The attached new blog post from Peter Mahler of the FarrellFritz law firm provides a clear and practical discussion concerning removals of LLC members and of the issue of fair market value vs. fair value.

If you want to find out what can happen when an LLC agreement authorizes member removal for any or no reason but doesn't address compensation for the terminated member's interest, read this week's New York Business Divorce.

12/06/2022

A key issue in the provisions of operating agreements of multi-member LLCs are those governing the duty, if any, of the LLCs ‘members and managers to give their members a right of first refusal with regard to “corporate opportunities” that the members or managers discover. The attached post from the FarrellFritz law firm provides an excellent introduction to that doctrine.

A claim for "usurpation of corporate opportunity" is simple to allege, but difficult to prove. Two recent cases out of the Manhattan Commercial Division and the U.S. District Court for the Southern District of New York explore the bounds of the corporate opportunity doctrine under New York and Delaw...

11/22/2022

In a post in his website entitled “New York Business Divorce,” Peter Mahler of the FarrellFritz law firm has published an excellent discussion of the difference between equity and debt as among LLCs and their members. The post is under New York law, but the lessons in it are likely to be useful in all other jurisdictions. The link to the post is

Characterizing funds transfers to and from the company and its owners as either loan or capital transactions, and failing to adequately document such transactions, can have drastic financial, tax, and litigation consequences. Learn more in this week's New York Business Divorce.

11/08/2022

NY Business Divorce published an excellent article about the business judgment rule at https://www.nybusinessdivorce.com/2022/05/articles/family-owned-businesses/principles-of-fiduciary-deference-the-business-judgment-rule-and-exculpatory-clauses/.

In this week's New York Business Divorce, read about the latest chapter in a long-running litigation saga between the son and daughter of artist Peter Max fighting for control of their family-owned corporation.

10/25/2022

The excellent post in New York Business Divorce addresses an important new legal argument against s*x discrimination in public and closely-held businesses. You can read it at https://www.nybusinessdivorce.com/2022/05/articles/podcast-episodes/corporate-oppression-doctrine-meets-s*x-discrimination-a-conversation-with-professor-meredith-miller/.

This week's post introduces the latest episode of the Business Divorce Roundtable podcast, featuring an interview with Professor Meredith Miller of Touro Law Center discussing her recent law review article entitled Challenging Gender Discrimination in Closely Held Firms: The Hope and Hazard of Corpo...

08/15/2022

Today’s post in the excellent blawg entitled “Business Law Divorce” makes clear the paramount importance of drafting dissolution provisions in LLC operating agreements with great care. The link is https://www.nybusinessdivorce.com/2022/08/articles/summer-shorts/summer-shorts-llc-dissolution-and-other-recent-decisions-of-interest/.

It's that time of year again! This 12th annual edition of Summer Shorts presents brief commentary on five recent decisions of interest in business divorce cases in the New York courts.

07/19/2022

In many LLC operating agreements, provisions that give the manager or one or more members the right to request or require some or all members to make additional contributions of capital to the LLC (“capital calls”) after the LLC’s formation in order to meet current or anticipated needs are among the most important provisions in the agreement. The latest post in the excellent blawg entitled “NY Divorce,” at A Lesson In Drafting Capital Call Provisions | New York Business Divorce (nybusinessdivorce.com), provides a very helpful overview of the law and practical considerations governing capital calls.

06/23/2022

Under the link below, the FarrellFritz law firm provides an excellent summary of two recent articles in the ABA Business Lawyer about the debate among LLC scholars and lawyers about whether internal LLC disputes should be resolved by derivate or direct lawsuits.

Here is the link: LLCs, Direct vs. Derivative Claims, and Special Litigation Committees: A Lively Debate | New York Business Divorce (nybusinessdivorce.com)

01/25/2022

https://www.nybusinessdivorce.com/2022/01/articles/llcs/a-two-act-play-of-llc-default-rules-and-manager-removal/
https://www.nybusinessdivorce.com/2022/01/articles/llcs/a-two-act-play-of-llc-default-rules-and-manager-removal/

The interplay between the default rules of the LLC law and the members' agreement sometimes gets complicated. In a duo of recent decisions from Justice Cohen, that interplay took center-stage when a majority of members invoked the default rules in an attempt to oust the managing member from authorit...

01/18/2022

Can a claim for judicial dissolution be made in arbitration?

The above question is addressed in the latest post from New York Business Divorce. Here’s the link:

The Skinny on Arbitrability of Judicial Dissolution Claims | New York Business Divorce (nybusinessdivorce.com)