THE “DIRECT VS. DERIVATIVE” PROBLEM

The attached new New York Business Divorce post addresses a “direct vs. derivative” problem that arises in litigation by LLC members against their LLCs or their managers or other members in many states.   The New Hampshire LLC Act is drafted to prevent the problem, and I suspect there are at least a few other acts that do the same.   But New York law—addressed in the post—is likely to be useful in many states besides New York.

Singin’ the Derivative Plaintiff Blues

 

TOP 10 BUSINESS DIVORCE CASES OF 2021

In the link below, the wonderful law blawg called NY Business Divorce lists what the authors of the blawg view as the top ten business divorce cases of 2021.  This list by itself may be useful to you, but I should add that the blawg website also has a superb index that makes it easy to find cases on specific LLC and closely held corporation issues important to practitioners.

Top 10 Business Divorce Cases of 2021

BUY-SELL PROVISION IN SHAREHOLDER AGREEMENT

The new blawg from the FarrellFritz law firm under the link below addresses a New York case in which the court enforced the buy-sell provision of a corporation’s shareholders agreement triggered by the shareholders’ petition for dissolution.  The case is also undoubtedly applicable to LLCs, and not only in NY but also, as least for purposes of persuasion, in other states.

Here’s the link:  Look Before You Leap: Buy-Sell Agreements Triggered by a Petition for Dissolution | New York Business Divorce (nybusinessdivorce.com)

LLC LITIGATION INVOLVING OWNERSHIP ISSUES

Under the link below is yet another excellent post in the law blawg “NY Business Divorce” about litigation involving issues as to who were the real owners of the LLCs in question and what was the real ownership percentage of each in each LLC.  In my experience, these issues arise constantly.  The only solution to these issues is, of course, crystal-clear drafting.

Here’s the link:

Disguised Agreements and Dissolution – New York Business Divorce (nybusinessdivorce.com)

IRS COST OF LIVING ADJUSTMENTS UNDER SECTION 199A

The IRS has just issued cost-of-living adjustments for federal tax purposes.  See Rev Proc 2021-45, 2021-48 IRB; IR 2021-219, 11/10/2021.

With regard to section 199A, the rev. proc. provides as follows:

Income-based limitations on Sec. 199A/qualified business income deduction. For 2022, taxpayers with taxable income above $170,050 for single and head of household returns, $340,100 for joint filers, and $170,050 for married filing separate returns are subject to certain limitations on the Code Sec. 199A deduction. The 2021 amounts were $164,900, $329,850, and $164,925.