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Business Divorce in NJ

Shareholder Disputes in New Jersey

A blog covering shareholder dispute law and litigation issues in New Jersey.

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Sep 23, 2019

When To Involve a Customer or Vendor in Business Divorce Litigation (If Ever)

In a previous blog post, “Don’t Let Ego – Yours or Your Attorney’s – Get in the Way of a Settlement,” I made a passing reference to the strategy of taking discovery (including depositions) from company customers and vendors in business divorce litigation. » Read More

Aug 14, 2019

Don’t Let Ego – Yours or Your Attorney’s – Get in The Way of a Settlement

The truth about business divorce litigation in New Jersey is that most of them result in some sort of buyout.  An entire (expensive) litigation often takes place over related and critical issues, such as who will be the buyer and who will sell; valuation issues, including (sometimes) the valuation date; and the equalization of money (such as when one side has paid itself too much).  » Read More

Jul 12, 2019

First Amendment Victory in Dispute over Control of Religious Non-Profit Corporation

Even after nearly three decades of handling shareholder disputes, every so often I get a case that presents new challenges and never-before-seen issues. Last week, we were able to declare victory in one such case when my partner, Andrew Linden, and I successfully moved to dismiss a corporate governance case involving an Indian Temple on First Amendment grounds. » Read More

Jun 11, 2019

Bad Faith Is Not Necessary for a Business Divorce

Shareholder oppression – at least in New Jersey – does not necessarily mean you must prove that your business partner is acting maliciously.  In fact, he could be a wonderful human being who honestly believes that he is doing the right thing for the business at all times and would never intentionally hurt you or the business.  » Read More

Apr 18, 2019

Competing Companies as Oppression

When majority owners of a closely-held business engage in conduct that constitutes shareholder oppression, it comes in all shapes and sizes. One wrongful act that seems to be occurring more frequently is the creation of a competing company that excludes one or more minority shareholders. » Read More

Mar 18, 2019

Minority Shareholders Don’t Always Have a Right to Information

There appears to be an uptick in the filing of meritless corporate shareholder and LLC member oppression claims in New Jersey.  Not everything that majority shareholders do that upsets a minority owner is worth spending legal fees to pursue.

When the only allegations one can make are a failure to keep an absentee shareholder fully informed of all business transactions, and a failure to obtain that minority shareholder’s consent to such transactions, that alone is rarely a recipe for successful litigation.  » Read More

Feb 15, 2019

Kicking a Member Out of an LLC – Dissociation Under the New Jersey LLC Statute

Years ago, oppressed minority shareholders in New Jersey corporations had more protection than oppressed members of a New Jersey LLC. When the statute was revised in 2014, that changed, and LLC members now have similar remedies available to them. But there is one little-known section of the New Jersey LLC statute that makes it a more powerful tool for the majority owners than the corporate statute – the ability to “dissociate” a member. » Read More

Dec 07, 2018

Why Should the Majority Owners Have More Valuation Documents Than I Do?

Since litigation is so expensive, when a shareholder dispute arises, talks about the minority shareholder being bought out often happen before attorneys even become involved.  Often a client will come in with an offer in hand, or even a fully negotiated deal, asking for me to “write it up.”  But what happens if you only have a handful of the documents necessary to value the company?  » Read More

Nov 29, 2018

New Case Addresses Termination of Employment as Shareholder Oppression

I have previously posted on this blog in the past about how the termination of a minority shareholder’s employment can constitute minority shareholder oppression in New Jersey, possibly entitling the minority shareholder to a buy-out. This is based on the theory that an owner of a small, closely-held business reasonably expects employment as long as he is a shareholder. » Read More

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