In closely held family businesses, trust often substitutes for formalities. This phenomenon was on display in Homapour v. 3M Props., LLC, 2026 N.Y. Slip Op. 04371 (1st Dept. July 9, 2026), where the formality of “read-before-you-sign” was tested. The dispute centered on allegations that a managing member repeatedly presented family members with signature pages detached from amended LLC operating agreements while assuring them that “nothing had changed.”

The principal takeaway from Bent is that the business judgment rule will not shield board members from suit when a complaint contains nonconclusory allegations of bad faith, retaliation, or other tortious conduct, but derivative standing remains limited to those who hold a membership interest in the corporation and cannot be acquired merely through an assignment of litigation claims.

Under New York law, whether a financing arrangement is a loan depends on its substance rather than its label. Courts generally evaluate three factors: (1) whether the agreement contains a meaningful reconciliation provision tied to actual revenue, (2) whether it lacks a finite term or fixed repayment schedule, and (3) whether the funder lacks recourse in the event of bankruptcy.

In Greer v. FAM Networks, LLC, 2026 N.Y. Slip Op. 04039 (1st Dept. June 25, 2026), the Appellate Division, First Department, held that a complaint alleging breach of a media exploitation agreement sufficiently pleaded the elements of a contract claim by identifying the agreement, claiming performance, alleging nonpayment and failure to account, and asserting resulting damages.

Summary judgment in lieu of a complaint under CPLR 3213 was central to the decision in Newmark Partners, L.P. v. Singer, 2026 N.Y. Slip Op. 03923 (1st Dept. June 23, 2026), the subject of today’s article, where the Appellate Division, First Department, affirmed the enforcement of a settlement agreement arising from a failed $13 million transaction.

In today’s article, we examine the interplay between releases, anti-reliance clauses, and the special facts doctrine under New York law, using the Appellate Division, First Department’s decision in Leinhardt v. Socure, Inc., 2026 N.Y. Slip Op. 03881 (1st Dept. June 18, 2026), as a focal point. The case addresses a recurring tension in fraud litigation: whether a party who later claims to have been misled can overcome the barriers imposed by a broad release and explicit discla

Under Section 706(a) of the New York Business Corporation Law (“BCL”), a director may be removed for cause either by shareholder vote or, where authorized by shareholder-adopted bylaws, by action of the board. In addition, where a corporation’s governing bylaws leave “cause” undefined, the board retains broad discretion to determine whether sufficient grounds for removal exist, subject to the business judgment rule.

Implied‑in‑fact contracts under New York law arise from conduct rather than explicit agreement, requiring objective evidence of mutual assent, definite terms, and an intent to be bound. They are fully enforceable but subject to important limitations, including the preclusive effect of governing express contracts.

In Rubin v. Hodes, the Appellate Division, Second Department, affirmed the dismissal of fraud and loan repayment claims brought by a former majority shareholder of a healthcare company. However, the courts never reached the merits of those claims because the plaintiff failed to disclose his stock interests and promissory notes in a prior bankruptcy proceeding.

Under New York law, alter ego liability, often referred to as piercing the corporate veil, is a doctrine that permits a court to disregard the corporate form and hold an individual officer, director, or owner liable where that person exercised domination and control over the entity and used that domination and control to commit a fraud or wrong that injured the plaintiff.

Merger clauses and the duplication of claims doctrine often operate to limit the availability of fraudulent inducement claims alongside breach of contract claims.

Contract interpretation principles require courts to give effect to the parties’ intent as expressed in the plain language of their agreement, while reading the contract as a whole and avoiding constructions that render provisions meaningless.

In Cortlandt St. Recovery Corp. v. TPG Capital Mgt., L.P., 2026 N.Y. Slip Op. 02775 (1st Dept. May 5, 2026), the Appellate Division, First Department, examined the limits of fraud claims arising from complex private‑equity financing transactions.

Contracts are intended to bring certainty and clarity to commercial relationships, yet disputes often arise when written terms leave room for more than one reasonable interpretation. Under New York law, the question of ambiguity can determine whether a case is resolved on the face of the agreement or proceeds into litigation over extrinsic evidence and party intent.

Under New York law, fraud claims are not duplicative of breach of contract claims when they are based on misrepresentations of present fact collateral to the contract, even if they seek the same damages. Applying that rule, the Appellate Division, First Department held in Metropolitan Partners Group Admin., LLC v. Nerney, 2026 N.Y. Slip Op. 02340 (1st Dept. Apr. 16, 2026), that plaintiff adequately pleaded both fraud and breach of contract claims ...

On April 14, 2026, the Appellate Division, First Department issued a decision in which it reiterated the limits of fraud claims in the corporate governance context. In Massoumi v. Ganju, 2026 N.Y. Slip Op. 02208 (1st Dept. Apr. 14, 2026), the Court unanimously affirmed summary judgment dismissing fraud claims brought by a former chief executive officer who alleged that his fellow executives and directors misled him in advance of a board meeting that resulted in his removal.

Courts will dismiss breach of contract claims based on nondisclosure agreements where the plaintiff fails to identify specific confidential information allegedly misused. And fraud claims fail as a matter of law when a sophisticated party relies on oral assurances contradicted by written disclosures.

By: Jeffrey M. Haber In Minihane v. Brown , 2026 N.Y. Slip Op. 01505 (2d Dept. Mar. 18, 2026), the Appellate Division, Second Department, addressed when the statute of limitations begins to run on a demand promissory note. The defendant borrowed $19,000 pursuant to a note that provided repayment was due only upon written demand, which could be made no earlier than January 1, 2015. Although the lender did not make a demand until September 2023, the borrower argued that the six

Under Limited Liability Company Law §  609(a), a member or manager of a limited liability company is not personally liable for the LLC’s debts, obligations, or liabilities solely by reason of being a member or acting in that capacity. Applying this rule, the courts in 27-21 27th St. Sponsors, LLC v. Kanta , 2026 N.Y. Slip Op. 01273 (1st Dept. Mar. 05, 2026), held that a minority member of an LLC could not be sued individually for the LLC’s obligations, as the operating agreem

By: Jeffrey M. Haber The doctrine of frustration of purpose is narrowly applied.¹ “In order to invoke the doctrine of frustration of purpose, the frustrated purpose must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense.”² In other words, the doctrine will not apply “unless the frustration is substantial.”³ However, “frustration of purpose … is not available where the event which prevented pe