June 17, 2026
On June 13, 2026, Schlam Stone & Dolan attorney Jeffrey M. Eilender secured the dismissal of four claims in Steinhardt v. Odzer, a shareholder dispute pending before Justice Andrea Masley of the New York County Commercial Division.
The case was brought by Michael H. Steinhardt, a minority shareholder of BT Supplies West, Inc. (BTSW), a company in the janitorial supply and PPE business. Steinhardt alleged that Steven Odzer and Ruben Azrak — Schlam Stone's clients, who are officers and shareholders of BTSW — had stolen and wasted company assets, diverted corporate opportunities, and breached their fiduciary duties. He asserted twelve causes of action, six derivatively on behalf of the company and six directly on his own behalf.
Schlam Stone moved to dismiss on several grounds, including that Steinhardt's direct breach of fiduciary duty and aiding and abetting claims — the ninth, tenth, eleventh, and twelfth causes of action — were derivative in nature and could not be maintained as direct claims. Justice Masley agreed, holding that any injury Steinhardt suffered as a minority shareholder flowed from harm to the corporation itself, not from a duty owed to him independently. Under settled New York law, allegations of mismanagement or diversion of assets by officers and directors, without more, plead a wrong to the corporation only, and may be pursued derivatively but not individually. Because the underlying breach of fiduciary duty claims could not stand as direct claims, the aiding and abetting claims fell as well. The case continues on the remaining eight causes of action.
Read the full decision here.