Court Grants Motion To Amend To Allege Alter Ego Liability

Posted: February 23, 2026 / Written by: Joshua Wurtzel, Samuel L. Butt, Channing J. Turner, Thomas A. Kissane / Categories Commercial, Motion to Amend

Court Grants Motion To Amend To Allege Alter Ego Liability

On January 7, 2026, in ERI/SNL 2015 Holdings LLC v. SNL Development Group LLC, Index No. 653695/2023 Justice Andrea Masley granted plaintiffs’ motion to amend the complaint to assert alter ego claims against a defendant. The Court explained:

Plaintiffs seek to amend the complaint to allege that Sharinn is the alter ego of SNL, SNL Development Group, SNL Capital Partners, SNL Construction, and SNL Fund, and thus liable for their breaches of contract and fraud under an alter ego liability theory. “[F]or a plaintiff to state a viable claim against a parent or alter ego of the corporation, the plaintiff must allege facts that, if proved, indicate that the parent or alter ego exercised complete domination of the corporation in respect to the transaction attacked and that such domination was used to commit a fraud or wrong against the plaintiff which resulted in the plaintiff's injury.” (Americore Drilling & Cutting, Inc. v EMB Contr. Corp., 198 AD3d 941, 944 [2d Dept 2021] [citations omitted].) At the pleading stage, a plaintiff must plead the elements of alter-ego liability in a non-conclusory manner. (2406-12 Amsterdam Assocs. LLC v Alianza LLC, 136 AD3d 512, 512 [1^st Dept 2016]; see also East Hampton Union Free School Dist. v Sandpebble Bldrs., Inc.16 NY3d 775, 776 [2011] [not required to plead the elements with the particularity required by CPLR 3016(b)].) However, “[e]vidence of domination alone does not suffice without an additional showing that it led to inequity, fraud or malfeasance.” (TNS Holdings Inc. v MKI Sec. Corp., 92 NY2d 335, 339 [1998] [citation omitted].)

Here, plaintiffs have alleged that Sharinn exercised complete domination by providing that Sharinn “is the co-founder, majority owner, and CEO … [of] SNL itself, SNL Development Group, SNL Capital Partners, and SNL Construction. He is the sole founder, manager and member of SNL Fund” and “Sharinn has at all relevant times been the CEO and 51% owner of SNL, which in turn is the 100% owner of SNL Development Group of which Sharinn is resident. Sharinn is the President and Representative Member of SNL Capital Partners, of which he owns 70.4%. He is the 60% owner and an officer of SNL Construction. He is the sole Member and Manager, and solely and exclusively controls, SNL Fund.” (NYSCEF 172, FPAC ¶¶ 13, 31.)

Moreover, plaintiffs provide various non-conclusory allegations in support of their assertion that Sharinn used his dominion over SNL, SNL Development Group, SNL Capital Partners, SNL Construction, and SNL Fund to commit wrongdoing. For instance, plaintiffs assert that (1) “[a]ll of Defendant entities operated out of the same… office, with the same staff”; (2) “Sharinn conver[ted] and misappropriate[d]… funds rightfully belonging to the Platforms, including more than $4.1 million in recourse fees, $2.7 million in mechanical rebates, construction management fees, and distributions”; (3) in April 2023 “about $6 million was moved to a different SNL Fund account still under Sharinn’s exclusive control . . . approximately $1.5 million was transferred to a personal account of Sharinn’s, and [] an additional $1.3 million was initially transferred . . . to an SNL Fund account and then immediately transferred to one of Sharinn’s personal accounts,” and (4) SNL Construction, at Sharinn’s direction, received PPP loans to cover payroll but “failed to disclose that fact to ERI, and chose instead to double-dip by taking reimbursement for the salaries… from the Platforms”. (Id. ¶¶ 31, 56, 84, 170.) Accordingly, plaintiffs’ motion to amend the complaint to make Sharinn the alter ego of SNL, SNL Development Group, SNL Capital Partners, SNL Construction, and SNL is granted.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning alter ego liability or motions to amend.