Commercial Division Blog: Current Developments in the Commercial Divisions of the New York State Courts

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May 13, 2024 First Department Revives Claims Against Accountants For Malpractice and Fraud Despite Evidence Showing They Disclosed The Purportedly Fraudulent Transactions In Company’s Financial Statements
On April 4, 2024, the Appellate Division, First Department, reversed a lower court decision to dismiss claims for malpractice and aiding and abetting fraud brought against an accounting firm despite evidence showing the accountants had disclosed the allegedly fraudulent transactions to the plaintiffs. In 1650 Broadway Associates, Inc., et al. v. Kenneth Strum, et al., Index No. 651690/2021, majority owners of the Manhattan 50s-themed Stardust Diner asserted claims against their former accountants after allegedly uncovering years of financial malfeasance by the diner’s minority owner and manager. The wrongdoing included taking unauthorized loans from the diner and forging one plaintiff’s signature on loan guarantees. The plaintiffs sued both the manager and the diner’s accounting firm, arguing the accountants knew of the fraudulent loans and breached their fiduciary duties by failing to alert them of the misconduct. Read More
July 4, 2020 Accountants Did Not Have Fiduciary Duty to Client
On June 18, 2020, Justice Borrok of the New York County Commercial Division issued a decision in Dea… Read More
April 28, 2017 Continuous Representation Doctrine Inapplicable if Limitation Period Set By Contract, Not Statute
On April 20, 2017, the First Department issued a decision in Aaron v. Deloitte Tax LLP, 2017 NY Slip… Read More
January 10, 2017 Negligent Misrepresentation Claim Against Accountants Fails For Lack of Link to Plaintiff's Use
On January 5, 2017, the First Department issued a decision in GSP Finance LLC v. KPMG LLP, 2017 NY S… Read More
December 8, 2016 Accounting Malpractice Claim Properly Dismissed for Lack of Privity
On November 30, 2016, the Second Department issued a decision in Weinstein v. CohnReznick, LLP, 2016… Read More
February 7, 2016 Claims Against Auditors of Failed Fund Dismissed Under In Pari Delicto Doctrine
On January 19, 2016, Justice Bransten of the New York County Commercial Division issued a decision i… Read More
August 11, 2015 Action May Be Brought Against Accountants For Failing To Disclose Client’s Employee's Financial Wrongdoing
On July 21, 2015, Justice Demarest of the Kings County Commercial Division issued a decision in JAG … Read More
January 21, 2015 "But for" Standard for Legal Malpractice Applies Equally to Accountant Malpractice Claim
On January 8, 2015, Justice Friedman of the New York County Commercial Division issued a decision in… Read More