Denco v. Genesco, Inc.

75 A.D.2d 742, 427 N.Y.S.2d 434, 1980 N.Y. App. Div. LEXIS 11280

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: May 6, 1980
• Status: Published

Opinions

Interlocutory judgment and order (one paper), Supreme Court, New York County, entered February 7, 1979, unanimously modified, on the law, to the extent of reversing so much thereof as creates subclasses of series B and C shareholders and dismisses the complaints as to those subclasses, and otherwise affirmed, with $75 costs and disbursements of this appeal to plaintiff. We are in agreement with the trial court’s determination that defendant Genesco, Inc. (Genesco), failed to honor its contractual obligations to exchange debentures for stock and is thus liable to B and C shareholders. However, the trial court erred in creating subclasses among said series B and C shareholders. In the earlier motion for an order pursuant to CPLR 902, permitting the maintenance of this action as a class action, Special Term, in disposing of Genesco’s contention that a class action was not maintainable because different shareholders had varying degrees of knowledge regarding the possible suspensions of the exchange privilege, held that such knowledge was not an element to be proved in any cause of action herein and that Genesco’s contractual undertakings, "by the express terms of the contracts inure to the benefit of all purchases of the stock involved herein.” In reviewing, on appeal, the orders based upon that decision, this court unanimously affirmed for the reasons stated by Special Term (52 AD2d 778). In our view, the holders of class B and C stock, did not, by signing and returning proxies, or by receiving such stock as a result of the settlement of an action, waive or lose their contractual rights to make the exchange. Settle order. Concur—Ross, Lupiano and Carro, JJ.