I Invested Millions in a Business. Can My Partner Say I Don’t Own It?

Napkin Litigation™ | Business Ownership Disputes

When a business becomes valuable, informal promises about ownership can turn into high-stakes litigation.

You invested the money. You trusted the operator. The business became successful.

Now your business partner is telling you:

“You were never actually an owner.”

Can they really do that?

Unfortunately, yes. They can say it and it may even be your burden to prove that they are wrong.

At Lieb at Law, P.C., we regularly represent investors, business owners, and co-owners in disputes where the value of the business has grown, relationships have broken down, and ownership itself becomes the central issue.

We call these cases Napkin Litigation™ because the business deal was real, but the paperwork was incomplete, informal, or never properly maintained.

Investing Money Does Not Automatically Resolve Ownership

Many investors assume that contributing capital automatically makes them an owner. The law is often more complicated.

Ownership may depend on the governing documents, the legal entity involved, the parties’ conduct, tax treatment, communications, and numerous other facts.

Every case is different and that difference starts by identifying the entity in which you claim ownership in (i.e., corporation, llc, partnership, etc.), which is why these disputes frequently require detailed factual investigations and litigation.

A person may have invested millions of dollars into a business and still face a legal fight over whether they own an interest in that business.

These Cases Usually Start the Same Way

The pattern is surprisingly consistent.

A successful operator has experience running the business. A passive investor provides the capital. The parties trust each other.

Instead of carefully documenting ownership, they say things like:

• “We’ll paper it later.”
• “We’re partners.”
• “Don’t worry about the lawyers.”
• “We’ll split everything 50/50.”

For years, everything works. Then the business becomes valuable. That’s when the disagreements begin.

Questions arise about distributions. Financial records become difficult to obtain. Major decisions happen without one owner.

Eventually, someone says: “You were never actually an owner.”

At that point, what seemed like a business disagreement becomes a high-stakes ownership dispute.

The First Question Is Not Who Invested More Money

Many people believe the case turns on who contributed the most money or who worked the hardest. That’s rarely where experienced litigators begin.

The first questions are much more fundamental:

• Who legally owns the asset?
• What legal entity owns the business?
• Who actually suffered the alleged harm?
• What evidence tells the ownership story?

Those answers determine what legal claims may be available and how the case should proceed.

What Evidence Can Matter?

No single document automatically wins an ownership dispute. Instead, courts often evaluate the entire relationship between the parties.

Depending on the circumstances, evidence may include:

• Operating agreements
• Bylaws
• Shareholder agreements
• Membership agreements
• Buy-sell agreements
• Capital contribution records
• Tax returns and Schedule K-1s
• Corporate or LLC records
• Bank records
• Emails
• Text messages
• Draft agreements
• Board minutes
• Witness testimony
• The parties’ course of dealing over time

When formal governance documents are missing or incomplete, the surrounding evidence often becomes critically important.

Why These Cases Become So Expensive

Ownership disputes rarely involve only one legal issue.

Once ownership is challenged, other claims frequently follow, including allegations involving:

• Breach of fiduciary duty
• Ultra vires acts
• Financial mismanagement
• Denial of distributions
• Access to books and records
• Deadlock between owners
• Real estate ownership disputes
• Partnership disagreements
• Corporate governance failures

The longer the dispute continues, the greater the risk that the business itself loses value.

Protecting the underlying investment often becomes just as important as winning the lawsuit.

The Best Time to Evaluate Ownership Is Before Litigation

Many owners don’t begin reviewing their documentation until after relationships have completely deteriorated.

By then, evidence may have disappeared, key witnesses may have changed positions, and important business decisions may already have been made.

If you have invested substantial money into a closely held business, commercial real estate venture, professional practice, or family enterprise, it is worth understanding exactly what documents establish your ownership before a dispute develops.

Concerned About an Ownership Dispute?

If you believe your ownership interest is being questioned, your business partner has excluded you from management, or you are concerned that your investment is no longer protected, obtaining experienced litigation counsel early can make a significant difference.

Lieb at Law, P.C. represents clients in complex ownership disputes involving closely held businesses, LLCs, corporations, partnerships, and co-owned real estate throughout New York and in other jurisdictions where appropriate.

Contact Lieb at Law 646.216.8009

Learn More | Napkin Litigation™ CLE

Co-Ownership Disputes in Real Estate and Closely Held Businesses

Attorney Andrew Lieb’s Napkin Litigation™ CLE series explores the legal and practical issues that arise when ownership, control, and governance break down in closely held businesses and real estate investments. The first course, Co-Ownership Disputes in Real Estate and Closely Held Businesses, is available on demand through Lawline.

View the On-Demand CLE

If your business dispute involves millions of dollars, disputed ownership, or the breakdown of a closely held venture, contact Lieb at Law, P.C. to discuss your situation.

This article is provided for informational purposes only and does not constitute legal advice. Reading this article or contacting Lieb at Law, P.C. does not create an attorney-client relationship. The facts and law applicable to each matter vary, and prior results do not guarantee a similar outcome. Attorney adverting. 

Lieb at Law, P.C.

Business Litigation | Ownership Disputes | Real Estate Litigation

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DHR's Proposed Regulations Focus on Settlement, But the Real Story Is Due Process

Editor's Note: This analysis is based on the New York State Division of Human Rights' June 17, 2026 proposed amendments to 9 NYCRR Part 465. A copy of the proposed regulations is available at the end of this article.

On June 17, 2026, the New York State Division of Human Rights ("DHR") proposed amendments to its regulations at 9 NYCRR Part 465. Much of the proposal focuses on creating greater and sooner opportunities for settlement through both informal and formal conciliation. The proposed regulations also establish criteria for evaluating settlement offers, identify minimum standardized terms for settlement agreements, and clarify the process by which a complainant may object to a settlement proposal that DHR otherwise deems fair and in the public interest.

The full 19-page proposal is available for review at the end of this article.

While the proposal is largely framed as a settlement initiative, the most consequential change may have little to do with settlement at all. Instead, it may be DHR's recognition that respondents are entitled to a more definite statement of the allegations against them before being required to defend a discrimination claim.

The real story is due process.

Specifically, DHR proposes to add subdivision 465.11(f), entitled More Definite or Detailed Statement, which would allow a respondent to apply in writing to the Chief Administrative Law Judge for a more definite or detailed statement of the complaint. According to the proposal, this amendment is intended to ensure compliance with the State Administrative Procedure Act.

That is significant because, for years, discrimination respondents have often been required to defend claims based on vague allegations that do not clearly identify the specific conduct, dates, statements, decisionmakers, policies, comparators, or facts underlying the alleged discrimination. In practice, respondents have frequently been left guessing as to the actual allegations they must defend against.

If adopted, the proposed rule would provide respondents with a direct procedural mechanism to seek clarification before hearing, rather than waiting until after an adverse determination to argue that the proceeding failed to comply with the State Administrative Procedure Act. This is more than a technical amendment. It is a recognition that a respondent cannot meaningfully defend a discrimination claim without adequate notice of the allegations being asserted.

Settlement Reform Is Still Important

The proposed regulations also expand DHR's settlement framework. The amendments contemplate conciliation before a complaint is filed, conciliation after a complaint is filed but before a determination after investigation, pre-hearing settlement conferences, division-initiated settlements, and settlement review during the hearing process.

In evaluating whether a settlement offer is substantial enough to warrant termination of a proceeding in the public interest, DHR may consider factors including the probability of success, the reasonableness of the offer, the complainant's economic loss, evidence of mental pain and suffering, the egregiousness of the alleged discrimination, and whether the public interest is best served by continuing the proceeding.

That expanded settlement framework may create earlier opportunities for respondents to resolve cases, particularly where a complainant refuses a settlement that DHR deems reasonable. However, the value of that process will depend heavily on how DHR evaluates settlement value, damages, public interest, and the reasonableness of objections.

What the Proposal Still Does Not Fix

Although the proposed amendments move DHR toward greater procedural structure, they do not go far enough to solve two critical problems in DHR proceedings.

First, the proposed regulations do not create a meaningful discovery dispute resolution process. Litigants may still be required to commence a special proceeding in Supreme Court to enforce subpoenas or compel disclosure. In fact, the proposed amendments appear to move in the opposite direction by eliminating language that previously allowed an Administrative Law Judge to "agree to the issuance of subpoenas" during the preliminary conference process.

That omission matters. DHR proceedings can involve complex employment, housing, education, public accommodation, and business records. Without a clear administrative mechanism to resolve discovery disputes, parties may continue to face delay, inefficiency, and unnecessary court intervention when evidence is withheld.

Second, the proposed regulations do not expressly state that DHR settlements and awards must be evaluated under New York's Consistency-of-Remedies Principle, as established in Thoreson v. Penthouse International, Ltd., 80 N.Y.2d 490 (1992), and affirmed in Thoreson v. Penthouse International, Ltd., 179 A.D.2d 29 (1st Dep't 1992).

To be sure, the proposed regulations reference the "reasonableness of offer," but they do not go into evidence of emotional distress. Stated otherwise, they do not expressly state that damages should be assessed by reference to comparable state and federal case law. That omission is particularly important with respect to emotional distress damages, where DHR determinations are often challenged based on alleged departures from judicial precedent.

Why This Matters for Respondents

For employers, housing providers, real estate brokerages, educational institutions, municipalities, public accommodations, and businesses, the proposed due process amendment could become an important defense tool. If a complaint is vague, conclusory, or insufficiently detailed, respondents may soon have a formal mechanism to demand clarity before proceeding to hearing.

That can impact litigation strategy from the outset. A more definite statement can help respondents identify relevant witnesses, preserve documents, evaluate exposure, prepare defenses, and assess whether early settlement is appropriate.

Stated differently, the proposed regulations are not merely about settlement. They are about how discrimination cases are framed, defended, valued, and resolved before DHR.

What Happens Next

The public comment period is open for 60 days before adoption.

While DHR's proposed amendments are framed largely as a settlement initiative, the more consequential development may be the agency's recognition that respondents are entitled to sufficient notice of the allegations against them. If adopted, the new procedure for seeking a more definite or detailed statement could become a significant due process tool in defending discrimination claims before the Division.

However, the proposal leaves unresolved major issues involving discovery enforcement and consistent damages valuation. Stakeholders should review the proposed regulations carefully and consider whether comments should be submitted before the rule is finalized.

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Source Material

This article is based on the New York State Division of Human Rights' proposed amendments to 9 NYCRR Part 465, published in the June 17, 2026 edition of the New York State Register as I.D. No. HRT-24-26-00008-P.

View the Official New York State Register Publication

Download the Proposed Regulatory Text (PDF)

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Discrimination defense requires more than knowing the law. It requires knowing how administrative agencies apply it. Lieb at Law, P.C. represents employers, housing providers, real estate brokerages, educational institutions, municipalities, public accommodations, and businesses in discrimination litigation and administrative proceedings throughout New York. If your organization is facing a claim before the New York State Division of Human Rights, contact Lieb at Law, P.C. to develop a strategic defense from the outset.

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NY Could Double the Time Required to Become a Real Estate Broker

New York Real Estate Licensing Update

New York May Double the Experience Requirement to Become a Real Estate Broker

The New York State Legislature has passed A9518, which would amend Real Property Law § 441(1)(b) and increase the required supervised salesperson experience from two years to four years before qualifying for a broker’s license.

What Would Change?

Currently, a New York real estate salesperson may qualify for a broker’s license after working under the supervision of a licensed broker for at least two consecutive years, assuming the applicant also satisfies the other licensing requirements.

A9518 would change that supervised experience requirement from two years to four years. In other words, future broker applicants would need twice as much supervised practical experience before becoming eligible for a broker’s license.

Why It Matters

Brokers do far more than close deals. They supervise salespersons, oversee compliance, manage risk, handle agency issues, and are responsible for ensuring that licensed activity is conducted lawfully.

The Big Question

Does more time under supervision actually create better brokers, or does competency depend more on training, mentorship, transaction exposure, and legal education?

The Argument for More Supervision

The responsibilities of real estate brokers have become more complex. Today’s brokers must understand fair housing compliance, agency disclosure, advertising rules, commission issues, antitrust risk, buyer representation agreements, escrow obligations, supervision duties, and Department of State enforcement priorities.

From that perspective, requiring more supervised experience may help ensure that future brokers have a broader base of practical exposure before they are permitted to supervise other licensees and operate brokerage businesses.

The Argument Against It

Time alone does not guarantee competency. Some salespersons receive meaningful mentorship, handle complicated transactions, and study the law intensely within two years. Others may spend four years with limited supervision, limited training, and limited exposure to complex issues.

The better question may be whether New York should focus only on years served, or whether broker readiness should be tied more directly to education, testing, supervision quality, compliance training, and actual experience.

Should the Governor Sign It?

If signed into law, A9518 would be a major shift for future broker applicants and brokerage companies planning for recruitment, succession, and growth.

Whether the change improves consumer protection will depend on whether the additional two years produce better supervision, better legal understanding, and better brokerage practices — or merely delay qualified salespersons from advancing.

Either way, every New York salesperson thinking about becoming a broker should be watching this bill closely.

Learn the Law Before You Lead the Brokerage

Lieb School teaches real estate professionals the legal updates, compliance risks, and practical rules they need to understand before supervising others.

Take Real Estate Continuing Education with Lieb School

NY Just Took Aim at Private Listing Networks: What Zillow, Compass, and Every Brokerage Need to Know

New York Just Took Aim at Private Listing Networks

Assembly Bill A10679 would require public marketing of residential listings unless a seller or landlord gives informed written consent to opt out.

This past Friday, May 29, 2026, the NYS Assembly passed Bill A10679.

On June 1, 2026, it passed the NYS Senate. 

According to the bill jacket, the purpose of the bill is to require timely public advertising or marketing of listed residential properties on platforms accessible to the general public, while permitting non-public marketing only where the seller gives informed, written direction after receiving a standardized state disclosure that explains the risks and tradeoffs of withholding a listing from public marketing.

Why This Matters

The bill directly targets private listing networks, pocket listings, private exclusives, and other restricted marketing strategies where properties may be shown to limited audiences before being publicly available.

The bill justification states that access to information shapes outcomes for buyers and sellers. It identifies Private Listing Networks as a strategy used by real estate brokers to quietly market properties to internal audiences for indefinite periods of time, outside the view of other brokerages and a broader pool of potential buyers.

If enacted, the law would create a new section of the Real Property Law, RPL 443-b, and would require a standardized disclosure form for any seller or landlord who opts out of public marketing.

The Proposed Opt-Out Disclosure

The proposed disclosure form would require sellers and landlords to acknowledge, in writing, the potential consequences of withholding a property from public marketing, including:

• Reduced visibility to buyers, tenants, and agents outside the listing brokerage.
• Limited online exposure through websites, syndicated feeds, email blasts, listservs, newsletters, and similar channels.
• Fewer offers and possible impact on price and timing because reduced exposure may affect the seller’s ability to sell or lease sooner, on better terms, or at a higher price.
• Restricted marketing channels including publicly accessible listing websites, MLS websites, online marketplaces, social media platforms, and broad digital services.
• Continued fair housing obligations because any marketing that does occur still cannot discriminate against protected classes.

Compliance Risk for Brokerages

Real estate brokerage firms should immediately review their private listing, pocket listing, and seller opt-out procedures. Even if this specific bill is not enacted, written informed consent can help show that the brokerage and its agents acted competently, explained material risks, and fulfilled their fiduciary duties.

The proposed law would also prohibit listing agents from altering or omitting required disclosure language in the standardized form. Any additional language added by a listing agent could not be misleading or inconsistent with the purpose of the disclosure.

For brokerages, this is not just a marketing issue. It is a litigation risk issue. If a seller later claims that a private listing strategy reduced exposure, suppressed competition, delayed a sale, or impacted price, the brokerage’s records, disclosures, and consent process will matter. 

Stay Ahead of Brokerage Litigation Risk

Private listing policies are rapidly becoming one of the most scrutinized issues in real estate. Whether this bill becomes law or not, brokerages should review their policies, disclosure forms, and seller communications now to reduce exposure to fiduciary duty, negligence, fair housing, and consumer protection claims.

If your brokerage needs guidance on private listings, seller disclosures, compliance procedures, or defending against real estate litigation, contact Lieb at Law, P.C. to discuss your risk management strategy before regulators, competitors, or plaintiffs' attorneys do.

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Joint Employer Rule Coming from DOJ Requires Deliberate Action in Setting Evidence Rather than Napkin Contracting

The US Department of Labor recently proposed a rule, which if adopted, will increase the possibility that two distinct companies are determined to be a joint employer with respect to claims under the FLSA (wages/overtime), FMLA (leave), and MSPA (seasonal work). 

The DOL’s proposal provides two ways joint employment can be established:

1. Vertical Joint Employment: two or more employers benefit simultaneously from an employee’s work.
2. Horizontal Joint Employment: an employee works separate hours for "sufficiently associated" employers.

The DOL’s factors for determining vertical joint employment include:

1. Whether the person/entity hires or fires the employee
2. Whether the person/entity substantially supervises or controls the employee’s work schedule or conditions of employment 
3. Whether the person/entity determines the employee’s rate and method of employment
4. Whether the person/entity maintains employee’s employment records

DOL’s factors for determining horizontal joint employment include:

1. Whether an employer acts, directly or indirectly, in the interest of another employer
2. Whether there is an arrangement between employers to interchange employees
3. Whether one employer controls or is controlled by another employer, or is under common control with another employer

Businesses can submit comments until June 22, 2026 by two methods where the proposed rule should be identified by Regulatory Information Number (RIN) 1235-AA48:

• Electronic Comments: Submit comments through the Federal eRulemaking Portal at https://www.regulations.gov. Follow the instructions for submitting comments.
• Mail: Address written submissions to: Division of Regulations, Legislation, and Interpretation, Wage and Hour Division, U.S. Department of Labor, Room S-3502, 200 Constitution Avenue NW, Washington, DC 20210.

Should this be adopted, employment contracts and policy manuals are going to be the evidence needed to defend yourself from being named on a related entities wrong. This is not a time to napkin contract if you want to avoid great exposure. 

When wage and hour, leave, or seasonal worker claims expand into disputes over joint employer liability, the exposure can quickly spread across affiliated entities, ownership groups, management companies, and related businesses.

Lieb at Law, P.C. litigates complex employment disputes involving FLSA, FMLA, misclassification, and joint employer claims, while helping businesses build defensible agreements and operational structures before litigation begins.

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The Rules Just Changed: Crime Rates and School Data Are Now First Amendment Protected—What Brokers Must Know

The landscape of Fair Housing liability is shifting on the federal level. While the industry has long avoided discussing "neighborhood quality" for fear of steering, a landmark April 24, 2026, HUD Memo has directed a change in course. Now, according to HUD, truthful, non-racial discussions are protected by the First Amendment when discussing neighborhood quality. However, this freedom comes with a modern twist: the risk of Disparate Impact Claims, like those that were reported on in Newsday's Long Island Divided.

The Lesson from Criminal Background Checks

To understand today's risk, we must first look backwards to 2016 HUD guidance where HUD established that even "neutral" policies, like blanket bans on tenants with criminal records, can be discriminatory because they disproportionately affect racial minorities. This created a three-step burden-shifting test:

1. Does the policy have a discriminatory effect?

2. Is there a "legitimate business interest"?

3. Is there a "less discriminatory alternative"?

2026 HUD Guidance: Facts vs. Steering

HUD’s 2026 position changes that test. HUD now states that providing identical, factual information about crime rates or schools to all clients is not "racial steering" because steering requires unequal treatment or discriminatory intent. That said, factual does not mean the information merely exists, but is actually accurate and not outdated. 

The Convergence: A New Theory of Liability

Yet, as discovered in Long Island Divided, the issue is that real estate brokers do not always give all clients the same information. To do so, a broker would be well served by putting the information into marketing materials to prove its the same. That works well for listing side brokerage when highlighting the positive of an area, but what happens in buyers' brokerage when highlighting the negative? Even on buyers' brokerage, if those materials highlight a negative, the real estate broker will be hurting their chances of obtaining future listings in that area, which is why most just do a discretional whisper. Yet, that whisper can get a broker sued for discrimination even after HUD's 2026 memo.

On top of that, don't forget local laws, such as NYC’s 2025 Fair Chance in Housing Act, which mandates case-by-case reviews of criminal histories rather than blanket denials, agents must be careful with neighborhood data. If a firm’s "neutral" crime-rating system systematically discourages buyers from minority-heavy tracts, it could trigger a Disparate Impact claim—even without discriminatory intent.

Strategic Recommendations

• Fact-Only Communication: Use objective, third-party data rather than anecdotal descriptions.

• Consistency is King: Provide the same data sets to every client to avoid steering allegations, through written proof of consistency.

• End Blanket Prohibitions: Move away from "blacklisting" certain ZIP codes because that is often undertaken based on discriminatory feelings rather than data. 

When these claims hit, they don’t start small. Lieb at Law represents brokerages in high-stakes Fair Housing and disparate impact litigation and helps prevent claims through proactive compliance strategy. Contact us to discuss your exposure.

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