In re Manela

Appellate Division of the Supreme Court of New York

In re Manela

63 A.D.2d 562, 404 N.Y.S.2d 982, 1978 N.Y. App. Div. LEXIS 11390

CourtAppellate Division of the Supreme Court of the State of New York

DecidedMay 2, 1978

StatusPublished

Cited by1 cases

This text of 63 A.D.2d 562 (In re Manela) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook

In re Manela, 63 A.D.2d 562, 404 N.Y.S.2d 982, 1978 N.Y. App. Div. LEXIS 11390 (N.Y. Ct. App. 1978).

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Opinion

Order, Supreme Court, New York County, entered December 12, 1977, denying petition for judicial dissolution of the corporation pursuant to section 1104 of the Business Corporation Law, on the ground that petitioner failed to demonstrate that he owned 50% of the corporation’s votiDng stock, unanimously reversed, on the law, without costs and without disbursements, petition reinstated, and hearing directed as to petitioner’s status. This was a proceeding for judicial dissolution of a corporation pursuant to section 1104 of the Business Corporation Law to which were joined causes of action seeking damages for alleged corporate waste and mismanagement, breach of contract, conversion, and goods sold and delivered. Petitioner alleged in substance that the corporation, Hello Love, Ltd., was incorporated pursuant to an agreement between himself and one Saul Pozensky, whereby each was to receive 50% of the voting shares. Petitioner alleged that he was subsequently "locked out” from the operation of the business. The answer acknowledges the original agreement, but goes on to assert in some detail that it was thereafter modified as a result of petitioner’s failure to pay the agreed amount. The answer further asserts that it was then agreed that petitioner would receive 25% of the stock for an equivalent investment, and that thereafter petitioner relinquished all interest in the corporation in exchange for the payment of a sum of money. The first question under section 1104 of the Business Corporation Law is, of course, whether or not petitioner is the owner of "one-half of all outstanding shares * * * entitled to vote in an election of directors”. Petitioner’s claim to be the equitable owner of the required percentage of voting shares presents an issue of fact that cannot be resolved on the basis of the papers submitted. A hearing to determine this threshold issue is required. Concur—Lupiano, J. P., Birns, Lane, Markewich and Sandler, JJ.

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Order, Supreme Court, New York County, entered December 12, 1977, denying petition for judicial dissolution of the corporation pursuant to section 1104 of the Business Corporation Law, on the ground that petitioner failed to demonstrate that he owned 50% of the corporation’s votiDng stock, unanimously reversed, on the law, without costs and without disbursements, petition reinstated, and hearing directed as to petitioner’s status. This was a proceeding for judicial dissolution of a corporation pursuant to section 1104 of the Business Corporation Law to which were joined causes of action seeking damages for alleged corporate waste and mismanagement, breach of contract, conversion, and goods sold and delivered. Petitioner alleged in substance that the corporation, Hello Love, Ltd., was incorporated pursuant to an agreement between himself and one Saul Pozensky, whereby each was to receive 50% of the voting shares. Petitioner alleged that he was subsequently "locked out” from the operation of the business. The answer acknowledges the original agreement, but goes on to assert in some detail that it was thereafter modified as a result of petitioner’s failure to pay the agreed amount. The answer further asserts that it was then agreed that petitioner would receive 25% of the stock for an equivalent investment, and that thereafter petitioner relinquished all interest in the corporation in exchange for the payment of a sum of money. The first question under section 1104 of the Business Corporation Law is, of course, whether or not petitioner is the owner of "one-half of all outstanding shares * * * entitled to vote in an election of directors”. Petitioner’s claim to be the equitable owner of the required percentage of voting shares presents an issue of fact that cannot be resolved on the basis of the papers submitted. A hearing to determine this threshold issue is required. Concur—Lupiano, J. P., Birns, Lane, Markewich and Sandler, JJ.

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Bluebook (online)

63 A.D.2d 562, 404 N.Y.S.2d 982, 1978 N.Y. App. Div. LEXIS 11390, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-manela-nyappdiv-1978.

Opinion

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