Jones v. Jones

Full title: KAREN JONES et al., Individually and on Behalf of Themselves and Other…

Court: Appellate Division of the Supreme Court of New York, First Department

Date published: Jan 25, 1996

223 A.D.2d 483 (N.Y. App. Div. 1996)

637 N.Y.S.2d 83

Opinion

January 25, 1996

Appeal from the Supreme Court, New York County (Leland DeGrasse, J.).

Plaintiffs-shareholders satisfied the demand requirements of Business Corporation Law § 626 (c) by forwarding a draft copy of the complaint with a demand letter to defendants-directors two and a half months prior to instituting this action ( see, Ripley v International Rys., 8 A.D.2d 310, 317, affd 8 N.Y.2d 430). Upon our review of the entire record, we find that defendants are entitled to summary judgment dismissing plaintiffs' claims based on defendants' failure to pay dividends in 1992. The uncontradicted evidence reveals that defendants were prohibited from declaring dividends since there was a stockholder equity deficit (Business Corporation Law § 510 [b]).

We have considered defendants' remaining contentions and find them to be without merit.

Concur — Rosenberger, J.P., Nardelli, Williams, Tom and Mazzarelli, JJ.