Court Opinion

ID: 5911017
Source: CourtListenerOpinion
Date Created: 2022-01-13 03:53:21.395072+00
Date Added: 2024-06-11T08:46:01.228821
License: Public Domain

— Order, Supreme Court, New York County (Beatrice Shainswit, J.), entered May 2, 1988, which, inter alia, granted petitioners’ motion to serve an amended petition and further granted respondents’ cross motion to strike portions of the amended petition, to the extent of striking paragraphs 20 through 45, unanimously modified, on the law and the facts, to the extent of reinstating paragraphs 42 through 44, and otherwise affirmed, without costs.
On January 27, 1988, petitioners commenced a special proceeding for the judicial dissolution of Aruba Import and Export Corp., a New York corporation organized in 1980 by four individuals: the two petitioners who own 50% of the corporation’s outstanding shares and the two respondents who own the other 50% of the outstanding shares.
Although the title of the proceeding stated that it was based on Business Corporation Law § 1104, which concerns corporate deadlock, the petition contained allegations which raised issues under both Business Corporation Law §§ 1104 and 1104-a, which deals with claims relating to corporate waste, oppression and fraud. In addition, paragraph 54 of the petition stated that the proceeding was brought under both Business Corporation Law §§ 1104 and 1104-a. Consequently, petitioners moved for leave to file an amended petition, which clarified their intention to proceed only under Business Corporation Law § 1104. Respondents then cross-moved to strike paragraphs 19 through 46 of the proposed amended petition, on the basis that these paragraphs alleged acts of fraud, oppression and corporate waste relevant only to a proceeding brought pursuant to Business Corporation Law § 1104-a.
Upon review of the amended petition, we find that paragraphs 42 through 44 were improperly stricken since these paragraphs specifically address claims relating to corporate deadlock and thus are clearly relevant to a Business Corporation Law § 1104 proceeding.
Accordingly, the order of the court below is modified to the extent of reinstating paragraphs 42 through 44 in the amended petition, and otherwise affirmed. Concur — Carro, J. P., Asch, Milonas and Wallach, JJ.