Opinion
May 2, 1989
Appeal from the Supreme Court, New York County (Michael Dontzin, J.).
Petitioners Mary MacDougall and Peter Coan, minority stockholders in a close corporation, brought a petition for dissolution pursuant to Business Corporation Law § 1104-a (a) on the grounds of oppressive conduct and looting by the corporate directors and majority stockholders Julia McFarlane and Judith Kress, also known as Judith Auchincloss. The allegations in the petition included exclusion of the petitioners from management, refusal to hold meetings, unjustified raises in salaries, refusal to permit inspection of the books and financial records, wasting of property, appropriation of corporate money for personal use, and looting of corporate assets.
The motion court, while stating that a hearing on all of the issues "might be appropriate", determined that the best course of action was to have an appraisal of petitioners' shares and direct the respondents to buy them. This determination was error. A hearing on the allegations was required before a remedy could be fashioned. (Matter of Rosen [Hofteller Enters.], 102 A.D.2d 855 [2d Dept 1984].) (It should be noted that a report by a Judicial Hearing Officer, apparently on the issue of looting, has not been accepted or read by the court in its determination. The report was not considered or even available to the motion court.)
Concur — Ross, J.P., Asch, Rosenberger, Wallach and Smith, JJ.