A newly-decided case in New Jersey dictates that the court follow an operating agreement (LLC) or shareholder agreement (corporation) that has a specific provision on valuing shares when an owner is retiring or otherwise voluntarily leaving. » Read More
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
Not surprisingly, business divorce litigation can be quite costly. Whether this cost is “worth it” is not always so easy to figure out. If a minority shareholder or LLC member in New Jersey has an interest valued at $600,000, spending $50,000 – $100,000 in legal fees may be warranted to achieve a buy-out. » Read More
Because termination of one’s employment does not necessarily equate to shareholder oppression under New Jersey law, as seen in my last post, it is often a good idea to take proactive measures to inoculate yourself against a termination that leaves you in the company as a shareholder, but not as an employee. » Read More
Many times, two 50% owners possess different areas of expertise and separate spheres of influence. For example, it is not uncommon for one business partner to be in charge of sales, with the other in charge of finances. Because of this, one person often has more contacts than the other. » Read More
As many of you have read here before, the New Jersey Limited Liability Company Act now includes recovery for minority member oppression. Those remedies cannot be waived, as a matter of law. However, the parties to an LLC’s operating agreement (or a corporation’s shareholder agreement) can agree to an alternate dispute resolution (“ADR”) mechanism in advance, impacting the forum in which these issues will be decided. » Read More
Many business owners involved in shareholder dispute litigation wish they could go back in time and rewrite their shareholder agreement. Unfortunately, it is often during expensive, protracted litigation with your business partner that you learn how your shareholder agreement could have been drafted to save you a costly lawsuit, or at least alter the course of that lawsuit. » Read More
