On May 22, 2014, the First Department issued a decision in Theatre District Realty Corp. v. Appleby, 2014 NY Slip Op. 03749, holding that a realty company’s sale of its office building was not in the due course because the company was not in the business of selling property.
In Theatre District Realty Corp., the First Department reversed a summary judgment declaring “that the sale of” a corporation’s building “does not require the consent of a super-majority of its shareholders pursuant to Business Corporation Law (BCL) § 909(a),” and instead declared “that the sale of the building requires the consent of a super-majority of the shareholders pursuant to BCL § 909(a).” The reason for the reversal was that
BCL § 909(a) governs the disposition of all or substantially all of a corporation’s assets, if not made in the usual or regular course of the business actually conducted by such corporation. Since plaintiff has never been engaged in the business of selling real estate, the sale of its building would not be made in the regular course of the business it actually conducts.
(Internal quotations and citations omitted) (emphasis added).