In an October 28, 2011 decision by Justice Driscoll the court found that a hearing was necessary to resolve conflicting testimony concerning the status of a company Petitioners sought to dissolve. The operation of the company was controlled by a three person board of directors which, by stipulation in a prior lawsuit, contained a board member from each of the two factions and a non-interested director appointed by the court. Petitioners argued that the company was failing financially and the directors were holding “sham” board meetings and taking ultra vires actions. Petitioners sought, based on these allegation, an injunction barring the board meetings, dissolution of the corporation and the appointment of a receiver pending dissolution. Respondents countered that the Petitioners’ representative refused to attend the board meetings and the actions taken were either part of the company’s traditional business practices or a normal capital expenditure. Respondents also argued that the company was profitable and continued to grow as evidenced by increased sales year over year and the company’s ability to maintain the same net income, despite increased costs. The court found that these conflicting factual statements required a hearing before the court could consider dissolution of the corporation or the appointment of a receiver.
Ziffer et al. v. Tapper et al., Sup Ct, Nassau County, October 28, 2011, Driscoll, J, Index No. 10846-11