logo

Nearly twenty years ago, the Appellate Division, First Department rocked the transactional world by throwing out a release and undoing a sale transaction between owners of a limited liability company based upon the unbending fiduciary duties the managing member of the LLC owed to the other (50%) member, in the decision in Blue Chip Emerald LLC v. Allied Partners Inc., 299 A.D.2d 278 (1st Dept. 2002).  The decisional law has evolved quite a bit since that time, making it much more difficult to bring or establish such a claim, including for fraudulent inducement.  A new decision of the First Department (Silver Point Capital Fund, L.P. v Riviera Resources, Inc., 2021 NY Slip Op 05312 (1st Dep’t Decided Oct 5, 2021)) underscores the sea change.

Evolving Law of Fiduciary Releases

I summarized the turnaround in the law in my October 27, 2011 article in the New York Law Journal Grappling With Fiduciary Duties in Enforcing Contracts.”

Read More

ALL THIS AND MORE

CONTACT US