NYC Business Litigation Attorneys

The first step is reading the governing agreement. The operating agreement, shareholder agreement, or partnership agreement controls what each owner may do unilaterally, what notice is required, and whether mediation or a cure period must precede suit. Acting before that review is how owners create the breach the other side pleads.

Where no written agreement exists, New York's default statutes govern, and they rarely produce what either owner assumed. Many agreements also impose written notice or a cure period as a precondition to filing, and skipping those steps can extinguish a claim. Preserve financial records and put every material communication in writing before taking any formal step. A partner dispute attorney should read the documents before a response goes out.

Four elements: a valid contract, the plaintiff’s own performance, the defendant’s failure to perform, and resulting damages. A breach causing no measurable loss supports nominal damages only. Where the written terms are clear, the agreement controls and outside evidence is generally excluded.

Damages, rather than liability, is the element that usually decides the outcome. New York limits recovery to losses the parties could have foreseen when they contracted, and lost profits must be proven with reasonable certainty rather than estimated. A party claiming breach also has to show it performed its own obligations or was excused, which is why the counterparty’s conduct before the breach matters as much as the breach itself.

Six years for breach of a written contract, measured from the date of the breach rather than the date it was discovered. Four years where the contract is for the sale of goods. Fraud runs six years from the fraud or two years from discovery, whichever is later.

Breach of fiduciary duty has no single period, and the answer turns on the remedy sought: three years where the claim is for money alone, six years where the relief is equitable or where fraud is essential to the claim. A contract can shorten these periods by agreement where the shortened period is reasonable. The clock running from breach rather than discovery is what catches business owners, since defective performance can be years old before its consequences appear.

Shareholder oppression occurs when majority owners defeat the reasonable expectations a minority shareholder held when investing. Freeze-outs from management, terminated employment, withheld distributions, and denied records are the recognized patterns. A shareholder holding twenty percent or more may petition under BCL § 1104-a.

Fraud is not required. A course of conduct that defeats reasonable expectations is sufficient, and courts assess those expectations against what the owner was promised and what the company actually did. Once a petition is filed, the corporation or the remaining shareholders may elect within ninety days to purchase the petitioner's shares at fair value under BCL § 1118, which ends the dissolution case and converts it into a valuation proceeding.

Yes. Unauthorized withdrawals support claims for breach of fiduciary duty, conversion, unjust enrichment, and in some cases fraud. Courts can order disgorgement of the amounts taken plus interest, and where withdrawals are ongoing, an application to freeze accounts can be heard within days.

The duty of loyalty every partner, member, and officer owes the company is what makes this more than a contract claim, and it carries remedies a contract claim does not, including removal from management and punitive damages where the conduct was deliberate. Proof comes from the financial record, which is why preservation precedes filing. Our business fraud practice pursues these alongside emergency account freezes.

Dissolution ends the business. Assets are liquidated, creditors are paid, and what remains is distributed to the owners. A buyout keeps the company operating, with one owner purchasing the other's interest at a fair value the parties negotiate or a court determines.

New York courts prefer buyouts because they preserve enterprise value and employment, and dissolution has been described as a remedy of last resort. Fair value in a statutory buyout is measured as of the day before the petition was filed, and no discount is applied for minority status, though a discount for lack of marketability is available. Where owners cannot agree on a private sale, assets may be sold at public auction. Our dissolution practice handles both paths.

The entity determines the statute, and the statute determines the remedies. Corporate shareholder disputes are governed by the Business Corporation Law, including the oppression standard and the buyout election. LLC disputes fall under the Limited Liability Company Law, and general partnerships under the Partnership Law.

The practical difference is largest at dissolution. A corporate shareholder can petition on grounds of oppression or deadlock, while an LLC member must show that it is not reasonably practicable to carry on the business in conformity with the operating agreement, a materially harder standard that deadlock alone does not satisfy. Which statute applies also governs inspection rights, notice requirements, and the standard a court applies to the conduct at issue.

Yes, but the route depends on what the claim is for. A suit seeking only a money judgment generally cannot restrain assets by injunction, because a creditor has no recognized interest in a debtor's unencumbered property before judgment. The remedy in that posture is attachment, which carries its own grounds.

Where the claim reaches the funds themselves, as with company money a fiduciary diverted, an injunction is available and the showing is specific: likelihood of success, irreparable injury absent relief, and a balance of equities favoring the applicant. Temporary restraining orders issue on days' notice, so an application filed at the start of a week can restrain an account before it ends. Our emergency injunction practice files both applications.

Mediate when the governing agreement requires it, when the other side can participate in good faith, and when no ongoing harm is compounding. Where a partner is moving assets, destroying records, or has locked out a co-owner, mediation delays relief and benefits the party causing the harm.

Many agreements make mediation a precondition to filing, and disregarding that clause can expose the filing party to dismissal or a fee award. Where it is optional, mediation is substantially cheaper than litigation and can resolve valuation disputes that would otherwise require competing experts. The assessment is situational rather than philosophical: it depends on whether the status quo is stable enough to survive the process.

Compensatory damages restore the position the injured party would have held had the wrong not occurred. Disgorgement strips gains from the party who benefited. Punitive damages are available for deliberate or egregious conduct, and attorney fees only where a contract or statute provides for them.

Breach of fiduciary duty damages are generally measured by the amount diverted plus interest from the date of the wrong, which is why the transaction record matters more than the narrative. Fraud claims can reach beyond the agreement, including rescission of a transaction and return of what was paid. A judgment is not recovery, and collection is its own proceeding: restraining notices, asset disclosure under oath, and turnover relief through judgment enforcement.