The Pennsylvania Supreme Court recently held that a contractual no-hire or “no poach” provision in a services contract between sophisticated business entities is not enforceable under the laws of the Commonwealth of Pennsylvania. This important case is entitled Pittsburgh Systems, Inc. v. Beemac Trucking, et. al., case no. 31 WAP 2019.
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United States District Court Judge Dismisses Jay Paterno’s Lawsuit Against Penn State
On Friday, February 25, 2016, United States District Court Judge Stengel issued a written opinion dismissing former Pennsylvania State University coaches Joseph “Jay” Paterno’s and William Kennedy’s lawsuit against their former employer, Penn State.
In Paterno, et. al v. The Pennsylvania State University, No. 14-4365, former Penn State assistant coaches Paterno and William commenced litigation in the United States District Court of the Eastern District of Pennsylvania alleging that their former employer:
- Violated their civil rights for the deprivation of their liberty and property interest without due process of law pursuant to 42 U.S.C. 1983;
- Intentionally interfered with prospective contractual relations;
- Committed civil conspiracy associated with the deprivation of their federal civil rights;
- Violated Pennsylvania Wage Payment and Collection Law, 43 P.S. 260, et.; and,
- Breached the contracts between them.
Pennsylvania Appellate Court Affirms Dissolution of Profitable Limited Liability Companies Based Finding of Deadlock
In Staiger v. Holohan, 100 A.3d 622 (Pa. Super. 2014), a Pennsylvania appellate court found that a trial court could order the dissolution of a profitable Pennsylvania Limited Liability Company (“LLC”).
The facts of the case are simple and fairly straightforward. Plaintiff Michael Staiger (“Staiger”) and Defendant Kevin Holohan (“Holohan”) formed two Pennsylvania LLCs: 200 East Airy, LLC (“200 East Airy”) and Green and Airy Laundromat, LLC (“Laundromat”). Stainger lent 200 East Airy $165,000, to be used as start-up capital. The members agreed in writing that Stainger would be repaid the start-up money within five years. Both men owned 50% of both 200 East Airy and Laundromat. Both 200 East Airy’s and Laundromat’s operating agreements contained identical language which set forth that the members (Holohan & Stainger) have the authority to make business decisions and the decisions of a majority are controlling. Shortly after forming Laundromat, the members executed an agreement which provided that another unnamed LLC of Holman’s was to manage Laundromat for a fee for an initial term of five years, then continue for two additional five-year periods.
Pennsylvania Appellate Court Upholds Appointment of Custodial Receiver after Finding a Shareholder Was Oppressed
In Adler v. Tauberg, 881 A.2d 1267 (Pa. Super. 2005), a Pennsylvania Appellate Court upheld an Order of the Court of Common Pleas of Allegheny County appointing Lawrence N. Adler, M.D., (“Adler”), a fifty percent shareholder, director and president of a closely-held Pennsylvania corporation, as custodian to manage the business affairs of the corporation after finding that the defendants oppressed him.
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Pennsylvania Superior Court Decision Required Claims to be filed “Derivatively” As Opposed to Individually on Behalf of a Shareholder
On February 5, 2014, a Superior Court of Pennsylvania issued an interesting and important decision explaining when claims must be brought derivatively as opposed to individually in the name of a shareholder. Hill v. Ofalt, 85 A.3d 540 (Pa. Super. Ct. 2014).
A “derivative” claim is a lawsuit brought by a shareholder on behalf
Squeeze-Out Technique: Withholding Information
Many times a majority shareholder seeking to squeeze-out a minority shareholder will deliberately withhold information relating to the closely held corporation. Withholding information is usually coupled with another form of oppression. The reason for the same is by leaving the minority shareholder in the dark about the status of the corporations and the actions of its officers and directors the minority shareholder will be unaware of the other forms of oppression.
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