Posts Categorized: Corporations

Posted: February 29, 2016

New York Courts Cannot Dissolve Business Entities Formed Under Another State’s Laws

On February 25, 2016, the First Department issued a decision in Matter of Raharney Capital, LLC v. Capital Stack LLC, 2016 NY Slip Op. 01425, reversing an earlier precedent and holding that a New York court does not have jurisdiction to dissolve a business entity formed under another state’s laws. In Matter of Raharney Capital,... Read more »

Posted: February 3, 2016

Arbitrary Decisions Not Covered by the Business Judgment Rule

On January 21, 2016, the First Department issued a decision in Tsui v. Chou, 2016 NY Slip Op. 00428, holding that the trial court “incorrectly determined that plaintiffs’ breach of fiduciary duty and breach of contract claims [we]re barred by the business judgment rule,” explaining: Plaintiffs, suing derivatively on behalf of all unit owners of... Read more »

Posted: January 23, 2016

Controlling Shareholders Did Not Have Fiduciary Duty to Minority Shareholder

On January 12, 2016, the First Department issued a decision in Arnett v. Charles Morgan Securities Inc., 2016 NY Slip Op. 00130, holding that controlling shareholders did not have a fiduciary duty to a minority shareholder, explaining: Plaintiff does not dispute defendants’ contention that Nevada, where EGI was incorporated, does not recognize a fiduciary duty... Read more »

Posted: January 2, 2016

Court Will Not Order Inspection of Books When Shareholder Did Not Make Statutory Demand

On December 21, 2015, Justice Platkin of the Albany County Commercial Division issued a decision in Heller v. Lewis, 2015 NY Slip Op. 51867(U), declining to order a corporate books and records inspection, explaining: Under New York law, shareholders have both statutory and common-law rights to inspect a corporation’s books and records so long as... Read more »

Posted: July 26, 2015

Plaintiff Must Nullify Cancellation Before Bringing A Derivative Action On Behalf Of A Defunct Delaware LLC

On July 6, 2015, Justice Oing of the New York County Commercial Division issued a decision in Meissner v. Yun, 2015 NY Slip Op. 31181(U), granting summary judgment against all of a plaintiff’s derivative claims. Meissner involved the disputed ownership of a Delaware LLC, and the plaintiff advanced a number of claims—breach of fiduciary duty,... Read more »

Posted: June 29, 2015

Corporation’s Payment of Back Taxes Retroactively Validated Contract Executed During Period of Delinquency

On June 2, 2015, Justice Singh of the New York County Commercial Division issued a decision in Exedus Contracting Corp. v. P.C. Consulting Mgmt. Corp., ruling that a corporation’s payment of overdue franchise taxes retroactively validated a contract it executed at a time when it “was dissolved by proclamation of the New York Department of... Read more »

Posted: June 11, 2015

Court of Appeals Grants Leave To Appeal In Case Involving Application of Business Judgment Rule to Going Private Transaction

On June 10, 2015, the Court of Appeals granted leave to appeal in Matter of Kenneth Cole Productions, Inc., Shareholder Litigation, addressing whether a going private transaction was properly reviewed under the business judgment rule (as Justice Marks of the New York County Commercial Division and the First Department concluded in this case) or whether... Read more »

Posted: January 16, 2015

Issues of Fact As To Whether Foreign Unlicensed Corporation Was Doing Business In New York Preclude Dismissal Under BCL § 1312

On January 7, 2015, Justice Kornreich of the New York County Commercial Division issued a decision in Skycom SRL v. F.A. & Partners, Inc., 2015 NY Slip Op. 30007(U), holding that issues of fact as to whether the plaintiff, a foreign unlicensed corporation, was “doing business in New York” precluded dismissal of the corporation’s claims... Read more »

Posted: January 6, 2015

Court Rejects Class Action Settlement

On December 19, 2014, Justice Schweitzer of the New York County Commercial Division issued a decision in Gordon v. Verizon Communications, Inc., 2014 NY Slip Op. 33367(U), refusing to approve a settlement of “a putative class action litigation centered on an acquisition by Verizon . . . of a substantial, minority interest in a wireless... Read more »

Posted: December 28, 2014

Officer of Dissolved Corporation Personally Liable For Obligations Incurred By Corporation Post-Dissolution

On December 17, 2014, the Second Department issued a decision in 80-02 Leasehold, LLC v. CM Realty Holdings Corp., 2014 NY Slip Op. 08805, holding that a corporate officer was personally liable for the corporation’s obligations under a commercial lease that was executed after the corporation’s dissolution. The Court explained: Pursuant to Tax Law §... Read more »