Grill and Murphy Have Corporate Dissolution Proceeding Dismissed in Its Entirety

December 4, 2020 | Commercial Litigation | Business Dissolution

David M. Grill and Kenneth C. Murphy, members of Rivkin Radler’s Business Dissolution practice, recently had dismissed a Petition for Dissolution filed by the shareholder and one-third owner of a New York City medical practice. Plaintiff filed the dissolution proceeding under New York’s Business Corporation Law Section 1104-a seeking an expedited summary order of dissolution.

Plaintiff alleged that he was subject to oppressive conduct committed by the majority shareholder when the other two members refused to accede to his demands for a buyout in the midst of the COVID pandemic and set aside a non-compete agreement. Grill and Murphy moved to dismiss all counts, noting to the Court that there was no evidence of oppression and, more critically, that where there is a shareholders’ agreement that provides a remedy in the event of a shareholder dispute, under New York law, dissolution is not permitted.  In addition, Grill and Murphy prevailed upon the Court in proving that the non-compete agreement in the shareholders’ agreement was reasonable in time and geographical scope and therefore enforceable.

After briefing and oral argument, the Court agreed with all of Rivkin Radler’s arguments, denied the application for dissolution and granted the cross-motion to dismiss the Petition in its entirety.

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