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New York Law Update

Cross Pollination: Don’t Limit Yourself

R. Shawn McBride recently published an article to the McBride For Business Blog on a topic that might be of interest: Cross Pollination:  Don’t Limit Yourself. He examines how some regions are better at manufacturing, some regions are better at capital formation, some regions are better at fostering start-up companies and some regions are better for Fortune 500 companies. You…

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New York Law Update: Shareholder Oppression and Forced Buyout (Post III)

When Piazza filed a lawsuit seeking judicial dissolution of the company based on oppression, Gioia Jr. responded that the action triggered Piazza’s obligation to sell his shares under the shareholders’ agreement.[1]  Indeed, the shareholders’ agreement provided that a judicial dissolution proceeding would be deemed a voluntary offer to sell and trigger buyout rights.  The court said, however, that such provision…

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New York Law Update: Shareholder Oppression and Forced Buyout (Post II)

In Piazza v. Gioia,[1] Piazza and Gioia Sr. founded Kings County Waterproofing Corp. (KCWC) in 1979 and held 40% and 60% of the shares, respectively.  Gioia Sr.’s son also worked for the company eventually became a 1/3 owner, along with his father and Piazza.  Their shareholders’ agreement contained stock transfer restrictions and buyout provisions, which, among other things, gave the…

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New York Law Update: Shareholder Oppression and Forced Buyout (Post I)

We write frequently about minority shareholder rights.  Really frequently.  We previously talked about Ritchie v. Rupe, a Texas Supreme Court case that made it harder for minority shareholders to bring lawsuits based on oppressive conduct by majority shareholders (see here).  We also discussed Bontempo v. Lare (available here), a Maryland case on remedies for shareholder oppression, which, in addition to…

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When Things Fall Apart: Business Partnership, Disagreement, and Dissolution (Part IV)

In Mizrahi v. Cohen,[1] a dentist and an optometrist formed a limited liability company for the purpose of the construction and operation of a mixed-use building in which they intended to set up their respective offices.  The two did not have an LLC agreement at the time they formed the LLC; it was executed a few months later when they…

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When Things Fall Apart: Business Partnership, Disagreement, and Dissolution (Part III)

In Saunders v. Firtel, as in Cline v. Grelock, the two business partners were close friends.[1]  Firtel was the sole owner of a pharmaceutical sales corporation called Adco and Saunders was a sales representative for a medical supply company.  In 1986, the two decided to enter into a formal business relationship by allowing Saunders to obtain a 49% shareholder interest…

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When Things Fall Apart: Business Partnership, Disagreement, and Dissolution (Part II)

In Cline v. Grelock,[1] the business partners were two lifetime friends who started a towing business called American Asset Recovery, LLC (“AAR”) d/b/a Hound Dog Recovery.  To get the business rolling, Grelock and Cline personally guaranteed a bank loan for AAR to purchase a motor vehicle for the business.  Unfortunately, the business was not very successful—it had substantial debts and…

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When Things Fall Apart: Business Partnership, Disagreement, and Dissolution (Part I)

Here at The R. Shawn McBride Law Firm, PLLC, we write and speak frequently on business partnership, especially the 4 Ds (death, disability, divorce, and disagreement), which can have a major impact on businesses.  In our previous blog series on business divorce, for example, we talked about why business partners may disagree, describing some instances of conflict that business owners…

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Covenant Not To Compete When Buying or Selling a Business (Part V)

Texas. In Texas, as in many other states, a covenant not to compete is enforceable if: (i) it is ancillary to or part of an otherwise enforceable agreement at the time the agreement is made; (ii) it is reasonable as to time, geographic area, and scope of activity to be restrained; and (iii) the restraint imposed is no greater than…

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Covenant Not To Compete When Buying or Selling a Business (Part IV)

New York: Sale of Business and Good Will Beyond the Label. In New York, non-competes used to be strongly disfavored by courts.[1]  Over time, however, courts came to recognize that there are situations in which it was not only desirable but essential to enforce non-competes.[2]  For example, in the context of a sale of a business along with its good…

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