Madison Liquidity Investors 103 LLC v. Carey

291 A.D.2d 362, 739 N.Y.S.2d 18, 2002 N.Y. App. Div. LEXIS 2128

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: February 28, 2002
• Status: Published

Opinion

—Order, Supreme Court, New York County (Sheila AbdusSalaam, J.), entered on or about March 29, 2001, which granted petitioners’ application to compel respondents to produce shareholder lists of the corporate respondents, unanimously affirmed, with costs.

As New York resident shareholders in respondent foreign corporations, petitioners are entitled to inspect the corporations’ shareholder lists for the avowed purpose of soliciting sales of stock from other shareholders (Business Corporation Law § 1315; Matter of Crane Co. v Anaconda Co., 39 NY2d 14). It does not avail respondents to argue that petitioners’ intent is to purchase less than a controlling interest at a “discount” for personal gain (see, id. at 22), at least absent any showing that forces other than the market would dictate the price of the shares petitioners would purchase (see, id. at 23). As respondents fail to raise an issue of fact in the latter regard, or other evidence tending to show an improper purpose or bad faith, their request for a hearing was properly rejected. Nor does it avail respondents to argue that under the law of Maryland, where the corporate respondents were incorporated, petitioners lack the minimum 5% equity interest necessary to entitle a shareholder to the inspection that petitioners seek (see, Sadler v NCR Corp., 928 F2d 48, 55). Concur — Tom, J.P., Andrias, Saxe, Wallach and Rubin, JJ.