Court Opinion

ID: 5737737
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:36:35.103093+00
Date Added: 2024-06-11T08:41:00.250145
License: Public Domain

Valente, J. (concurring).
I join in the opinion of McNally, J. with the following comments. Section 20 of the Stock Corporation Law (giving an objecting stockholder of a corporation the right to have his stock appraised) becomes applicable, as I read it, only in cases where the sale, lease or exchange of substantially all of the property of a corporation is not effected in the regular course of business. In such instance, the requisite consent of stockholders is mandated by the statute and dissenting stockholders may have their stock appraised. There is no such requirement where a sale is made in the regular course of business; and the transaction involved in the instant proceeding *543was in the regular course of business (Eisen v. Post, 3 N Y 2d 518). The provisions in the stockholders’ agreement and the amended certificate of incorporation prescribing consent of 70% of the stockholders for a sale do not affect or limit the application of section 20. Their only impact is to restrict the power of the corporation to dispose of its property in the regular course of its business. But once the consent of 70% of the stockholders has been obtained, to a sale in the regular course of business, the objecting stockholders have no right to an appraisal. The words in section 20 referring to “ consent of stockholders ” should not be read — in isolation from the context of the entire section — to give a right of appraisal to an objecting stockholder simply because the stockholders’ agreement or certificate of incorporation requires a certain percentage of stockholder assent for sales in the regular course of business. The test is whether the sale, lease or exchange is in the regular course of business. If it is, then there is no right of appraisal in a dissenting stockholder regardless of the percentage of stockholders’ assent that may be required (and has been obtained) to approve the transaction.
Rabin, J. P., and Eager, J., concur with McNally and Valente, JJ.; Stevens, J., concurs in result only.
Order entered on November 24,1961 unanimously reversed, on the law and on the facts, with $20 costs and disbursements to the appellant, and the motion denied.