The parties in Stravroulakis v. Pelakanos , 58 Misc.3d 1221(A) (Sup. Ct. N.Y. Co. Feb. 13, 2018), are the owners of Bareburger. The majority owners attempted to oust a shareholder by improper means and the court thought otherwise. The oversimplified facts of Stravroulakis are as follows. Plaintiff and some of his buddies (the “Owners”) owned a dive bar in Brooklyn called Sputnik, in which they started to sell organic hamburgers. The hamburgers became so popular that the

Since the summer of 2015, the Delaware Chancery Court has issued a series of rulings in which disclosure-only settlements in merger objection lawsuits have been rejected. Those rulings culminated with the decision by Chancellor Andre Bouchard in January 2016, in which he confirmed that parties submitting disclosure-only settlements to Chancery Court judges should expect enhanced scrutiny of such settlements. In In Re Trulia, Inc. Stockholder Litigation , 129 A.3d 884 (Del. C

On February 21, 2018, the United States Supreme Court ruled that the anti-retaliation protections passed by Congress after the 2008 financial crisis extend only to individuals who report suspected violations of the securities laws to the Securities and Exchange Commission (“SEC” or “Commission”). In Digital Realty Trust, Inc. v. Somers , 583 U.S. _____ (2018) ( here ), the Court held that individuals who blow the whistle through internal means only are precluded from the anti

In Dormitory Authority of the State of New York v. Samson Construction Co. (Feb. 15, 2018) , the New York Court of Appeals was called on to address, inter alia, the question of whether the City of New York “is an intended third-party beneficiary of the architectural services contract between…Dormitory Authority of the State of New York (DASNY) and…Perkins Eastman Architects, P.C. (Perkins)….” The facts of Dormitory are relatively simple and typical of many construction proje

Through the years, numerous class action lawsuits have been brought involving securities fraud, corporate misconduct, unfair business practices and other claims. This article provides a brief overview of class action lawsuits . What is a class action lawsuit? A class action is a procedural device in which one or more persons sue on behalf of a larger group of persons, referred to as the “class.” The class action lawsuit started in the courts of equity in seventeenth-century

The New York Court of Appeals rules that a litigant must produce information from her Facebook account notwithstanding her chosen “privacy” settings. The plaintiff in Forman v. Henkin (February 13, 2018) was injured after falling from a horse owned by defendant and alleges she suffered “spinal and traumatic brain injuries resulting in cognitive deficits, memory loss, difficulties with written and oral communication, and social isolation.” During the litigation, plaintiff r

Last November, this Blog wrote about an announcement Michael D. Granston (“Granston”), Director of the DOJ Commercial Litigation Branch, Fraud Section, made at a health care conference concerning the DOJ’s intention to seek dismissal of meritless qui tam cases. ( Here .) Since the speech was not accompanied by a policy memorandum, there was skepticism within the False Claims Act (“FCA”) bar that there would be any material change in policy. That skepticism was met last month

Directors and officers of publicly traded companies have a fiduciary duty to their shareholders. In the face of corporate misconduct, executives are often reluctant to take legal action against their peers. However, shareholders may bring a derivative lawsuit against the board of directors and other responsible parties. The goal is to compel the board to remedy the damages sustained by company and to protect the interests of investors. Nonetheless, a successful claim depends

On January 31, 2018, the Second Department decided 159 MP Corp. v. Redbridge Bedford, LLC. The Court in 159 MP , recognized that the “appeal raises an issue of first impression in the appellate courts of New York…” to the extent that it “address the question of whether written leases negotiated at arm’s length by commercial tenants may include a waiver of the right to declarative relief that is enforceable at law or, alternatively, whether such a waiver is void and unenfor

Why Corporate Governance Matters Today, it is essential for directors and officers of public companies to have an understanding of corporate governance. Essentially, this involves adhering to state and federal rules and regulations, meeting fiduciary obligations and establishing and implementing internal controls. Ultimately, an attorney with experience in internal investigations and corporate governance can provide guidance on these critical responsibilities. Sarbanes-Oxley

Alternative dispute resolution (“ADR”) has been gaining momentum as an alternative to litigation over the past decade. Most major corporations insist on it, in one form or another, in every contract they execute. ADR can take on many forms, including negotiation, mediation and arbitration. All ADR methods have pros and cons that should be considered before making them a part of a company’s legal process. Independent Negotiation This is the least formal ADR tactic available an

Like many things in life, operating a business with another person, or many persons, is a risk. There is always the possibility that your business associates may act for their own benefit, rather than for the benefit of the business. The law recognizes this risk and assigns special obligations of fidelity to business partners. These obligations are commonly known as fiduciary duties, which require business partners (including officers, directors and managing shareholders of c

In P. Zaccaro, Co., Inc., et al. v. DHA Capital, LLC, et al. (1st Dep’t January 25, 2018) , the First Department affirmed the dismissal of plaintiffs’ action seeking a significant brokerage commission on the sale of real property in lower Manhattan (the “Premises”) for in excess of $50,000,000.00 because the plaintiff brokers failed to disclose that they represented both the buyer and the seller. According to decisions in the underlying action, the facts as alleged in the co

The Financial Industry Regulatory Authority (“FINRA”) recently released its 2018 Regulatory and Examination Priorities Letter (the “Priorities Letter”) ( here ). here .=">here</a>."> The Priorities Letter identifies the areas that FINRA intends to focus on in the coming year. “The coming year will bring both continuity and change in FINRA’s programs,” FINRA President and CEO, Robert Cook (“Cook”), wrote in a note accompanying the letter. FINRA’S 2018 Priorities at a Glance T

The Public Company Accounting Oversight Board (“PCAOB” or the “Board”) is a nonprofit corporation established by Congress to oversee the audits of public companies. The Board was created as part of the Sarbanes-Oxley Act of 2002 in response to the accounting scandals at Enron Corp. and WorldCom Inc. – scandals that cost investors billions of dollars. Prior to the creation of the Board, the profession was self-regulated. The PCAOB protects investors by promoting informative,

The Financial Industry Regulatory Inc. ("FINRA") recently proposed establishing a roster of arbitrators specifically qualified to adjudicate expungement cases, a concept that was initially recommended by FINRA’s regulatory task force in December 2015. What is an expungement? The expungement process allows a customer complaint regarding a broker to be removed from FINRA’s online database known as BrokerCheck. By relying on arbitrators with the necessary background and training

In two recent blog posts entitled: “ Appellate Division, Second Department Tells Foreclosing Residential Lender to ‘SHOW ME THE EVIDENCE ’” and “ The Second Department Denies Summary Judgment to Another Foreclosing Mortgagee Due to the Insufficiency of Evidence Presented on the Motion ,” foreclosing mortgagees were cautioned that evidence in admissible form must be submitted to the court to demonstrate compliance with the many statutory provisions that must be followed to en

Last month, the Second Circuit reinstated a securities class action against Alibaba Group Holding Ltd. (“Alibaba” or the “Company”) and four of its senior executives for making materially false and misleading statements and omissions in connection with the Company’s September 2014 initial public offering (“IPO”). In June 2016, Chief Judge Colleen McMahon of the U.S. District Court for the Southern District of New York dismissed the complaint because the plaintiffs failed to s