Last year New York courts decided a number of important cases involving business divorce and related litigation between co-owners of closely held companies, highlighted by a pair of Appellate Division, First Department decisions addressing subject-matter jurisdiction over petitions to dissolve foreign entities and shareholder rights to inspect books and records of a corporation’s wholly-owned subsidiary. This annual review also features a number of significant decisions from Second Department trial and appellate courts concerning partnership dissolution and valuation, tie-breaker authority and liability, and limited liability company (LLC) member fiduciary duty.
Foreign Business Entities
A year ago in this column we reported on the Manhattan Commercial Division’s decision in Matter of Kuafu Hudson Yards (Sup Ct, NY County, April 14, 2015, Index No. 650599/15), in which the court granted a Delaware LLC’s motion to dismiss a co-manager’s dissolution petition for lack of subject-matter jurisdiction despite a New York forum-selection clause in the company’s operating agreement. In doing so, the court acknowledged a split in appellate authority and noted that “[a]t some point we will get final authority on this issue.”
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