Friday, March 28, 2008

Busting Up a Business

New York Business Divorce has been publishing a series on a New York business dissolution case under the title Anatomy of a Dissolution Slugfest. I think all are worth reading for anyone setting up a business or wanting to get out of an existing business. I wish I could say that all problems would be solved with proper planning but not all problems can be contemplated and planned for - just that things go better when an attempt is made.

Thje following is from Anatomy of a Dissolution Slugfest: Part I:

"Question: What do you get when you take a luxury automobile dealership consisting of multiple corporations and limited liability companies, stir in three business partners, add contradictory documents concerning one partner’s ownership interest, season with a federal indictment of that same partner for stock fraud following which the other two partners freeze him out of the business, top off with a pair of litigators and bring to a boil?"

Anatomy of a Dissolution Slugfest: Part V contains descriptions (and links to the subequent parts) of the remainder of the series:

...Part II (read it here) covered some additional issues raised in the court’s initial decision including the defendants’ argument that they acted reasonably by excluding Marciano from the business after his criminal indictment. Part III (read it here) highlighted portions of the court’s June 2007 decision in which it denied Marciano’s motion to compel payment to him of distributions pending the litigation and granted his motion for leave to amend his complaint. Part IV (read it here) addressed the court's September 2007 decision in which it denied defendants' motion for summary judgment contesting Marciano's share ownership and arguing that Marciano's March 2007 guilty plea to unrelated stock fraud charges justified their excluding him from the business operations.

This Part V examines the court's final decision dated December 7, 2007, concerning a new twist in the proceedings triggered by the defendants' assignment of a valuable dealership lease held by a company co-owned by Marciano to another company owned solely by the defendants. A postscript follows for readers interested in the outcome of the case and some reflections on its greater meaning.