Over the last several years, the books-and-records proceeding and its corresponding shareholder rights of inspection seem to have entered a bit of renaissance period in the courts. We here at New York Business Divorce have reported on at least nine decisions primarily addressing the topic since September 2014, going on record to proclaim the phenomenon as a “boost” for the summary proceeding, by which minority owners in closely-held businesses can get a window into the management and operation of the companies from which they’ve been shut out. We’ve even gone so far as to suggest that books-and-records proceedings may be “on a roll” of late, both in terms of an expansion what constitutes a “proper purpose” for bringing the proceeding, as well as in terms of the scope of information attainable.

That trend, at least with respect to the frequency with which issues related to inspection rights are being litigated, appears to be continuing into 2018. What follows are summaries of three of this year’s more notable decisions addressing inspection rights – all from Manhattan Supreme Court, as it happens.

But first, a quick refresher on the subject matter at hand…
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Tenant-shareholders in co-op apartments occasionally fall into the same kinds of internal disputes over corporate governance experienced by shareholders in any other kind of closely held corporation. This week’s New York Business Divorce highlights a recently decided battle for board seats among co-owners of a small Manhattan co-op, in which the outcome turned on the court’s construction of arguably out-of-sync provisions in the by-laws and shareholders’ agreement.
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A rare case stemming from a petition to dissolve a residential co-op corporation is the subject of this week’s New York Business Divorce. The decision by Justice Carolyn Demarest in McDaniel v. 162 Columbia Heights addresses challenging valuation issues for this unique type of business corporation.

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Corporate bylaw provisions governing the number of directors and procedures for their appointment can sometimes play a critical role in the outcome of disputes among shareholders of closely held corporations, as illustrated in a recent case highlighted in this week’s New York Business Divorce involving a small residential co-op.

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