Commercial Division Blog
Posted: June 20, 2017 / Categories Commercial, Corporations
Dissolved Corporation May Sue or be Sued Until its Affairs are Fully Adjusted
On June 14, 2017, the Second Department issued a decision in Greater Bright Light Home Care Services, Inc. v. Jeffries-El, 2017 NY Slip Op. 04821, holding that a corporation that had been dissolved by proclamation had standing to sue, explaining:
A dissolved corporation may not carry on new business and no longer has the right to commence an action in the courts of this State, except in specific circumstances permitted by statute. Business Corporation Law § 1006 provides, in relevant part, that a dissolved corporation may continue to function for the purpose of winding up the affairs of the corporation, and that the dissolution of a corporation shall not affect any remedy available to or against such corporation, its directors, officers or shareholders for any right or claim existing or any liability incurred before such dissolution. A corporation therefore continues to exist after dissolution for the winding up of its affairs, and a dissolved corporation may sue or be sued on its obligations, including contractual obligations and contingent claims, until its affairs are fully adjusted. Here, the MMIS checks at issue were allegedly transferred in or around July 1999 and August 1999, and El Equity asserted its cross claims against SDS and HSBC in or about May 2000. El Equity is permitted to pursue its cross claims against SDS and HSBC in the course of winding up its affairs. Additionally, under the circumstances presented, including that El Equity had previously attempted to settle its counterclaims against GBL and the causes of action asserted by GBL against it, SDS failed to demonstrate that El Equity no longer maintained the capacity to assert its cross claims in 2013, when El Equity moved for summary judgment.
(Internal quotations and citations omitted) (emphasis added).