The Internal Affairs doctrine requires a court to apply the law of the state where a business was formed, or organized, to disputes between the owners regardless of the circumstances. New Jersey courts have applied a more traditional analysis of conflict of laws issues and may refuse to apply... read more
Limited Liability Company laws in New Jersey and many states provide a cause of action for the oppression of minority members of company against those in control of the business. Oppression of a minority LLC member is measured by the reasonable expectations of the minority member in those states... read more
Under New Jersey business law, minority oppression refers to conduct in which the majority shareholders or directors of a corporation engage in behavior that prejudices the rights or interests of the minority shareholders unfairly. We see shared holder oppression in a variety of action: New Jersey’s Business Corporations code... read more
A plaintiff seeking to bring a derivative claim on behalf of a corporation, limited liability company or limited partnership must be “suitable” and represent the interests of the business. A member of a limited liability company may sue individually to recover or protect the member’s individual right. New Jersey... read more
The removal of a member from a limited liability company, known as involuntary dissociation, is permitted by statute in most states and may also be permitted in an operating agreement. Removal is permitted when a member has engaged in wrongful conduct that has or will materially affect the company... read more
A business divorce is the process by which the owners of a business separate their business interests. The process involves negotiation and may also require litigation. These cases can be divided into four phases: the emergent phase, the examination phase, the valuation phase and the resolution phase. Most owner... read more
In most lawsuits, there is a presumption that the matter will, in most circumstances, go to trial. A party involved in a dissolution action involving a closely held New York corporation needs to request a hearing, however, or risk having the matter resolved in a summary fashion. That is... read more
Courts determine whether an individual has an equity interest in a law firm partnership by examining the financial investment and risk taken by the claimed owner, such as payment of capital and guarantees of obligations. The rise of the non-equity partner in law firms management has changed the status... read more
Buy-sell agreements, like a shotgun sale triggered by a deadlock, are the principal means by which the owners of closely held businesses protect against the worst consequences of deadlock. Commonly used shotgun provisions allow one party to set the price and allow the other party to decided whether to... read more
Owners of a closely held business, be it a corporation, limited liability company or partnership, may enter into contracts that are triggered when the principals have become deadlocked. Anti-deadlock provisions may provide for the appointment of an independent director, for alternative dispute resolution, or for the compelled sale of... read more
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