Opinion
April 10, 2001.
Order, Supreme Court, New York County (Beatrice Shainswit, J.), entered on or about December 11, 2000, denying defendants-appellants' motion to stay the consolidated State actions pending investigation by a Special Litigation Committee, unanimously affirmed, with costs.
Joseph H. Weiss, for Plaintiffs-Respondents
Richard H. Klapper, for Defendants-Appellants
Joseph H. Weiss, for Plaintiffs-Respondents
Richard H. Klapper, for Defendants-Appellants
Rosenberger, J.P., Ellerin, Wallach, Lerner, Rubin, JJ.
These consolidated derivative actions were brought on behalf of Bank of New York and its parent company, The Bank of New York Company, Inc. Plaintiffs allege that the bank's board of directors failed to prevent the bank from being used as a part of a money laundering operation. A similar Federal action was commenced in 1999. Approximately one year subsequent to commencement of the State derivative proceedings, the bank appointed a Special Litigation Committee (SLC) to investigate plaintiffs ' claims and thereafter moved in both Federal and State court to stay the proceedings pending the SLC investigation. The Federal District Court denied a stay as did the motion court in the decision here reviewed.
Whether to grant a stay of proceedings in a stockholder derivative action pending action by an SLC is a matter left to the discretion of the motion court (see, Lichtenberg v. Zinn, 243 A.D.2d 1045); New York has no statute mandating a stay in the circumstances presented. Given the bank's delay in appointing the SLC and the makeup of the SLC, which includes members whose impartiality is suspect, the motion court's exercise of discretion in denying the requested stay was appropriate.
We have considered defendants-appellants' remaining claims and find them unavailing.
THIS CONSTITUTES THE DECISION AND ORDER OF SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.