Dusel v. Castellani

43 A.D.2d 799, 350 N.Y.S.2d 258, 1973 N.Y. App. Div. LEXIS 2906

Opinion

Judgment unanimously affirmed, with costs. Memorandum: Special Term properly ordered the appellant corporation and its president to make available to petitioner director certain records of the corporation. Matter of Cohen v. Cocoline Prods. (309 N. Y. 119) asserts the reason for this unqualified right (p. 123) in this statement: “Because of these positive duties and potential liabilities, the courts of this State have accorded to corporate directors an absolute, unqualified right, having its roots in the common law, to inspect their corporate books and records [citing cases] ”. (See, also, Matter of Newmark v. C & C Super Corp., 3 A D 2d 823, affd. 3 N Y 2d 790.) Appellant corporation argues that petitioner is the principal of a competing corporation, is hostile to appellant and would use the information to the detriment of appellant. Notwithstanding this contention, so long as petitioner remains a director and has not been legally removed from office, he cannot be denied his right of inspection (Matter of Davis v. Keilsohn Offset Co., 273 App. Div. 695). If petitioner should attempt to use the information which he secures from his inspection to the damage of the corporation, appellant corporation could sue him for breach of his fiduciary responsibility as a director and compel him to account for his misconduct. Business Corporation Law, § 720, subd. [a], par. [1], cl. [A]). On and after November 23, 1973 the court has received conflicting letters from attorneys for the parties as to the petitioner’s present status as a director. We have given these letters no consideration. Our decision is based upon the record before us at the date of the argument of this appeal, October 22, 1973. (Appeal from judgment of Erie Special Term in article 78 proceeding, granting examination of corporate books and records.) Present — Goldman, P. J., Del Vecchio, Marsh, Witmer and Moule, JJ.