Under the Knife: Failed Brain Surgery Joint Venture Results in Large Damages Award for Plaintiff

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Judge Roach issued a rare decision after trial in a business divorce last year that is worth a review, mainly for purposes of understanding damages available in litigation over a failed joint venture. For those interested in doing further research after reading this post, the full name of the case is Advanced Healthcare Mgmt. Servs., LLC v. VHS Acquisition Subsidiary No. 9, Inc. The Plaintiff, Dr. Sagun Tuli (“Dr. Tuli”), is a well-credentialed spinal neurosurgeon who conceived of a business plan for a Brain & Spine Institute (“the Institute”) which she envisioned to be more efficient and effective than traditional … Continue reading

No Duty To Buy Back Minority Shares

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A Court of Chancery of Delaware recently held that majority shareholders of a close corporation have no fiduciary duty in the buy back of a minority shareholder’s interest in the corporation.  The decision specifically mentions that Massachusetts differs from Delaware in that shareholders of a Massachusetts close corporation owe each other a fiduciary duty.  After reading the Delaware decision, one might jump to the erroneous conclusion that majority shareholders of a Massachusetts close corporation have a duty to purchase shares from minority owners who want to liquidate their investment.  But that is not true. As a blanket rule under the … Continue reading

The Power of Partnership Agreements: Quantum Meruit Claim Fails

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In a decision that emphasizes the power of partnership agreements, the Court of Chancery in Delaware held that if a written agreement defines how assets will be shared when a partnership dissolves, partners cannot use a quantum meruit claim to increase their share. Quantum meruit is a ‘quasi-contractual’ theory of recovery that compensates an individual for work performed regardless of whether the benefited party expressly agreed to pay for the work. In the Delaware case, two lawyers decided to dissolve their partnership and entered into a liquidation agreement to distribute the assets. One of the partners later argued that he … Continue reading

The Price of Freezing Out a Partner

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A recent Massachusetts case provided an example at how an at-will partnership can often come to an abrupt end – with one partner escorted off the premises by an armed officer. In 2009, David Zak and Lisa Reed (a lawyer and a mortgage broker respectively) orally agreed to start a loan modification partnership in the aftermath of the subprime mortgage crisis. The pair split the profits from the business evenly and each received a bi-weekly salary. During the first year of the business, Reed attempted to have Zak agree to a written partnership agreement, but Zak assured her that none … Continue reading

Court Rules on Non-Solicitation Agreement and Social Media

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In Invidia LLC v. DiFonzo, a case involving a non-compete between a Belmont hair salon and its former stylist, the Middlesex Superior Court recently denied the plaintiff’s Motion for Preliminary Injunction. The Court reasoned that Invidia failed to establish that the non-compete would be found enforceable and that the salon would suffer irreparable harm. More interesting was the Court’s stance on the plaintiff’s claims that the stylist used Facebook to solicit its clients. The stylist “friended” eight of the salon’s customers and then her new employer posted on the stylist’s Facebook page that they had hired her. A client responded … Continue reading