Case ID: ad2d_34/html/0750-02.html
Source: Caselaw Access Project
Author: {"author": "", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Margaret Kalil, Respondent, v. Leonard Kingstone, Appellant, et al., Defendants.
   Order entered November 21, 1969, denying motion to dismiss the eomplaint as to defendant Kingstone reversed on the law, with $50 costs and disbursements to appellant, and motion granted and the complaint dismissed as to defendant Kingstone, and without prejudice to an application to intervene in the pending action entitled Rosenblatt v. Kingstone (Index No. 5137/1969). This is a stockholder’s derivative action on behalf of Omega Equities Corp. The moving defendant is a director of that company. There is pending an action by other stockholders of the same corporation against the moving defendant and other directors and officers, entitled Rosenblatt v. Kingstone. In that action an order was issued staying and enjoining all shareholders of Omega Equities Corp. from commencing and prosecuting any suit in this jurisdiction against any of the defendants named therein based on any of the transactions there complained about. Neither the validity nor the propriety of that order is here questioned. Plaintiff asserts that the transaction basing her action is not the same as any of those involved in the Rosenblatt case. The gravamen of the Rosenblatt case is that the defendants caused the corporation to issue stock which they were able to acquire at prices below reasonable value by virtue of using confidential information acquired in the course of their fiduciary relationship with the company. The instant eomplaint alleges the sale of that stock by the moving defendant, one of the defendants in the Rosenblatt case, at a large profit. The only distinction in the allegations is that here it is alleged that the moving defendant has realized the fruits of the alleged wrongdoing. We do not regard this as a distinction. Concur — McGivern, J. P., McNally, Steuer and Tilzer, JJ.