A confession of judgment has often been viewed as an important tool in settling a litigation or finalizing a transaction. In 2019, the New York State Legislature made some significant.
Courts continue to refer to federal Racketeering Influenced and Corrupt Organizations Act (“RICO”) claims as “potent weapons” that are equivalent to a “thermonuclear device” in cases.
In
Farro v. Schochet, the Second Department recently held that §1002 of the NY LLC Law restricted a dissenting member’s remedy to an appraisal for the fair value of his interest in the business after a freeze-out merger.[1] Thus, the Court reduced the legal remedies for a minority LLC member that lacked protections in the operating agreement against the merger.
Background on Freeze-out Mergers and Appraisal Remedy
A freeze-out merger typically involves controlling member(s) forcing minority member(s) out of a business by (1) creating a new business where the minority member(s) do not have a stake and then (2) using their controlling stake in the original business to merge it into the new business to freeze-out the minority member(s).