The Shareholder/Partner Disputes and Dissolutions Team has significant experience litigating and resolving disputes between shareholders, members and partners of closely held corporations, partnerships, limited liability companies (LLCs) and family-owned businesses. We counsel businesses and their owners related to buyouts and other transactions, executive compensation matters, succession planning, insurance coverage, risk management, labor and employment matters, corporate tax issues and intellectual property matters. We also represent businesses and owners in business dissolutions, including law firm dissolutions.
We represent closely held businesses and their owners in intra-corporate disputes. Our attorneys are frequently retained by clients facing issues involving majority and minority shareholder disputes, management or governance issues, business succession planning, employment disputes, admission of additional shareholders or members, breach of fiduciary duty and fraud claims, theft of trade secrets, dissolution, freeze-outs, business and asset valuation disputes, breach of contract claims, non-compete and/or non-solicitation agreements, cyber incidents, and wrongful use or misappropriation of business opportunities and assets. We also advise clients on risk management issues and how to avoid litigation, and can assist in contract/agreement review.
We also have extensive experience navigating complex partnership agreements, operating agreements and bylaws. Our attorneys represent majority and minority owners of accounting, engineering, medical and other professional firms regarding shareholder/partnership disputes and dissolutions.
Law firms present issues unique to transitioning or dissolving businesses, particularly intertwined legal, ethical and commercial issues. We represent law firms of all sizes, practices areas and geographic platforms, as well as law firm partners. We are experienced in providing effective legal, ethical and business solutions. Our experience includes:
- Protecting the law firm’s or partner’s “book of business,” including addressing the portability of matters and client choice, proper and ethical notice, and ensuring that client interests are also protected—the ultimate obligation of every lawyer.
- Negotiating the division of client fees in ongoing matters.
- Advising on effective and ethical uses of advertising prior to and after dissolution or separation.
- Administering, reconciling, and properly and ethically winding down trust accounts or Interest on Lawyer Accounts (IOLAs).
- Addressing employment and human resource (HR) issues.
- Ensuring the protection and proper management of physical and electronic matter files and client information.
- Ensuring proper preservation of hard copy and electronic data towards satisfying legal and ethical requirements.
- Obtaining professional malpractice insurance policies, and tail policies, to provide indemnity and defense until all statutes of limitations pass.
- Taking steps to maintain, if not grow, “brand” goodwill.
We are often retained by closely held businesses or their owners regarding claims of wrongdoing by a principal, contractor, vendor or trusted employee. This includes allegations of fraud, breach of fiduciary duty, diverting funds and misappropriation of business assets. These matters often require swift action, including preserving records, protecting trade secrets and other confidential business information, and seeking emergency relief such as temporary restraining orders, preliminary injunctions and orders of attachment or seizure. We frequently work with forensic accountants, cybersecurity professionals and other experts to uncover potential wrongdoing by a business insider, defend against such claims, or to mitigate and redress future harms.
Disputes between business owners often involve the valuation of a business or an ownership interest. Our attorneys work collaboratively with forensic accountants, real estate appraisers and business valuation experts to advocate effectively for our clients, including in the context of a buyout, freeze-out or dissolution. This includes working with business valuation professionals to negotiate and successfully resolve matters out of court, litigate pre-trial issues and present expert testimony at trial.
Representative matters include:
- Represented a former executive and minority owner of several related businesses regarding the valuation of the minority owner’s interest and for breach of his employment agreement. Successfully achieved an arbitration award of over $11 million.
- Represented members of a real estate development LLC in a dispute with a dissenting member. Successfully resolved a threatened dissolution and negotiated a favorable buyout of the dissenting member.
- Represented a shareholder of a livery company in a dissolution proceeding and non-compete litigation. The corporation was dissolved and its assets were auctioned, with proceeds equitably distributed to the two shareholders.
- Represented a former partner of an accounting firm regarding the valuation and payout of his partnership interest following his withdrawal from the firm. Achieved a favorable valuation of the client’s partnership interest following a bench trial and appeal.
- Represented a majority owner and the corporation against the managing, but minority, owner who was pilfering the organization through a variety of schemes, including inflated distributions, conversion of shares, inflated expenses and diverting business opportunities. Obtained a substantial, confidential settlement, which included reimbursement of all disputed amounts and all fees and costs.
- Represented a family business whose highly valued customer list was stolen by the companion of an employee and sold to a disreputable competitor. We secured the list and all copies as well as obtained restitution for damage to goodwill and expenses.
- Obtained injunctions, contempt remedies and money judgments against an in-house lawyer who “went rogue” on his employer after a denied promotion and breached his ethical duties to his client.
- Secured a favorable buyout of a disloyal minority shareholder who was diverting business opportunities and using corporate assets for his own benefits.
- Negotiated the forfeiture of a significant amount of stock options by a disloyal former executive who threatened to disseminate an incorrect interpretation of confidential business information prior to the company’s initial public offering. Obtained a confidentiality order to prevent the disclosures, and the former executive’s breach of duty cost him several million dollars.
- Acted as a court-appointed receiver and referee in a complex dissolution of a large law firm, overseeing the allocation and selection of clients, files, attorneys and employees, real property interests and other assets; resolving multiple disputes among the parties and key players; and addressing accounting and ethical compliance issues to ensure the protection of client interests and an orderly transition of the business of the former law firm.
- Investigated, litigated and remediated a long-running embezzlement scheme by a highly trusted employee who developed multiple avenues to steal funds from her employer, while concealing those schemes for several years. Obtained full restitution after obtaining an order of attachment against all assets purchased with the stolen funds, including precious metals, stocks and ultimately substantial life insurance proceeds—because the premiums were paid with stolen funds.