New York Court of Appeals
Howard S. Denburg, Respondent v. Parker Chapin Flattau & Klimpl, Appellant
November 18, 199382 N.Y.2d 375
Summary
The New York Court of Appeals held that subparagraph 18(a) of the partnership agreement, which imposed a financial penalty on withdrawing partners, is unenforceable as a violation of public policy under Cohen v. Lord, Day & Lord. The Court also concluded that the appellate division erred in granting summary judgment because factual disputes exist regarding a purported 1986 settlement, and therefore remanded the case for further proceedings. A dissent argued that the provision is distinguishable from Cohen and should be upheld.