Court Defaults Corporation In Appraisal Proceeding For Failure To Hire New Legal Counsel After Prior Counsel’s Withdrawal

Posted: August 8, 2025 / Written by: Jeffrey M. Eilender, Thomas A. Kissane, Samuel L. Butt, Joshua Wurtzel, Channing J. Turner / Category Default Judgment

Court Defaults Corporation In Appraisal Proceeding For Failure To Hire New Legal Counsel After Prior Counsel’s Withdrawal

On May 22, 2025, Justice Margaret A. Chan granted a motion for default judgment in an appraisal proceeding against a corporation that failed to retain new legal counsel after its prior counsel withdrew from the case. In Terence Holtz v. Myslabs, Inc., Index No. 650665/2024, the petitioner sought to fix the fair value of its former interest in the respondent, Myslabs, Inc. Myslabs initially appeared in the case represented by counsel. However, its counsel later moved to withdraw, which the Court granted. Despite a 30-day stay of proceedings, Myslabs did not obtain new counsel. This justified granting default.

The Court explained:

Respondent is a corporation and is therefore required to be represented by counsel; it cannot appear pro se. . . . But respondent has not had counsel since November 8, 2024. Respondent’s former counsel Romano Law PLLC . . . first appeared in this action on February 28, 2024. . . . On November 8, this court granted Romano Law’s motion to withdraw as counsel for respondent and stayed the action for 30 days after service of the order to give respondent time to hire new counsel. . . . The stay therefore ended on December 18, 2024, and yet to date [] there has been no notice of appearance by counsel for respondent. . . . Respondent is therefore in default.

The attorneys at Schlam Stone & Dolan frequently counsel corporate clients on how to avoid potential pitfalls that may lead to a default judgment. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.