Opinion
3931/10.
Decided March 10, 2010.
Petitioner's counsel, Paula Brown Donaldson, New York, New York.
By verified petition filed on February 16, 2010, The House of the Lord And Church On The Mount ("petitioner") moves, ex parte, and pursuant to Religious Corporations Law § 12 and Not for Profit Law § 511 for leave to sell real property.
BACKGROUND
The instant verified petition alleges, inter alia, the following salient facts. Petitioner is a Religious Corporations organized and existing under Article of 7 of the Religious Corporations Law. Petitioner owns a four story brownstone property located at 1393 Pacific Street, Brooklyn, New York (Section:5 Block 1202, Lot:67) which is encumbered by a mortgage ("the subject property"). Petitioner would like to sell the subject property for $595,000 and has an appraisal showing that as of August 2008 the property has a fair market value of $590,000. Petitioner will use the proceeds of the sale to pay down a mortgage the subject property as other properties which the petitioner owns. Petitioner does not contemplate dissolving itself as a result of the sale and contends that the sale is in petitioner's best interest.
PAPERS SUBMITTED
Petitioner has submitted a verified petition with eight annexed exhibits labeled A through H, as well as a separate proposed order. Exhibit A is a copy of petitioner's certificate of incorporation and bylaws. The certificate of incorporation states that the principal office of the corporation is Brooklyn or Kings in New York. Exhibit B is a list of the names and addresses of petitioner's National Board of Elders and National Board of Trustees. Exhibit C is a copy of the contract of sale of the subject property for which the petitioner seeks judicial approval. Exhibit D is an appraisal of the subject property. Exhibit E is a financial report setting forth the petitioner's assets and liabilities as of December 31, 2007. Exhibit F is a resolution of petitioner's National Board of Elders to sell the subject property. Exhibit G is a resolution of petitioner's National Board of Elders to accept the terms of the contract of sale of the subject property. Exhibit H is a resolution of petitioner's members of the 415 Atlantic Avenue Church congregation which adopts the resolution to accept the terms of the contract of sale of the subject property.
LAW AND APPLICATION
Religious Corporations Law § 12(1)(a) provides in pertinent part that a religious corporation shall not sell, mortgage or lease for a term exceeding five years any of its real property without applying for and obtaining leave of the court therefor pursuant to section five hundred eleven of the not-for-profit corporation law as that section is modified by paragraph (d-1) of subsection one of section two-b of this chapter.
N-PCL §§ 510 and 511 collectively set forth the procedure to be followed when a non-for-profit corporation seeks to sell all or substantially all of its assets. The petitioner must obtain approval of the Supreme Court and attendant Attorney General notification, designed to preserve charitable assets for public purposes ( see generally: In re Sephardic Foundation for Torah Studies, Inc., 18 Misc 3d 1141(A) [N.Y.Sup.,2008] citing, Manhattan Eye, Ear and Throat Hospital, 2 NY3d 585 at 590).
N-PCL § 511(a) provides in pertinent part that a corporation required by law to obtain leave of court to sell, lease, exchange or otherwise dispose of all or substantially all its assets, shall present a verified petition to the supreme court of the judicial district, or the county court of the county, wherein the corporation has its office or principal place of carrying out the purposes for which it was formed.
N-PCL § 511(b) specifically provides as follows:
"Upon presentation of the petition, the court shall direct that a minimum of fifteen days notice be given by mail or in person to the attorney general, and in its discretion may direct that notice of the application be given, personally or by mail, to any person interested therein, as member, officer or creditor of the corporation. The court shall have authority to shorten the time for service on the attorney general upon a showing of good cause. The notice shall specify the time and place, fixed by the court, for a hearing upon the application. Any person interested, whether or not formally notified, may appear at the hearing and show cause why the application should not be granted."
Pursuant to N-PCL § 511(d), the court must assess whether "the consideration and terms of the transaction are fair and reasonable to the corporation and that the purposes of the corporation . . . will be promoted" ( see Manhattan Eye, Ear and Throat Hospital, supra 2 NY3d at 590).
The submitted proposed order contains text on the lower left portion of the second page apparently imprinted from a pre-printed stamp which the court should address. The pre-printed stamp contains the following text all in uppercase:
"THE ATTORNEY GENERAL HEREBY APPEARS HEREIN, HAS NO OBJECTION TO THE GRANTING OF JUDICIAL APPROVAL HEREON, ACKNOWLEDGES RECEIPT OF STATUTORY NOTICE, AND DEMANDS SERVICE OF ALL PAPERS SUBMITTED HEREIN INCLUDING ALL ORDERS, JUDGMENTS AND ENDORSEMENTS OF THE COURT, SAID NO OBJECTION IS CONDITIONED ON SUBMISSION OF THE MATTER TO THE COURT WITHIN 30 DAYS HEREAFTER ASSISTANT ATTORNEY GENERALDATE"
The text contains three entries in ink, namely, "2-3-10" above the date; the name "Paula Gellman" in print below and the signature of Paula Gellman above the Assistant Attorney General pre-printed text.
Notwithstanding, the pre-printed text described above, the petition and accompanying papers do not demonstrate that the attorney general was served with the instant petition or mention how the attorney general should be notified. The court does not deem the pre-printed text and hand written entries to satisfy the notice requirements of N-PCL § 511(b). At the very least, the Court would require an affirmation or affidavit from someone with personal knowledge explaining the circumstance and the import of the text and signatures as it pertains to the notice requirements to the Attorney General.
Therefore, in accordance with N-PCL § 511(b), the court hereby directs that petitioner serve the New York State Attorney General with the instant petition and this decision and order by mail no later than March 23, 2010. The matter will be adjourned to Part 52 of this court at 9:30 am on April 13, 2010 to allow the New York State Attorney General to be heard and for further proceedings in accordance with N-PCL § 511(d).
The foregoing constitutes the order of this court.