Can a shareholder petitioning for dissolution under Section 1104-a of the Business Corporation Law rely upon the “surcharge” provision of the statute to sue a non-shareholder, director, or officer for corporate misappropriation as an end-run around legal obstacles to an otherwise viable substative cause of action? We tackle that issue in this week’s New York Business Divorce.
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New York’s statutes authorizing a judicial dissolution petition by oppressed minority shareholders, and granting respondents a corresponding right to elect to purchase the petitioner’s shares, include a provision for a “surcharge” upon controlling shareholders for wrongful dissipation or transfer of corporate assets. It’s a rarely litigated provision, as evidenced by a court decision last month which may be the first ever reported case in which a surcharge claim was upheld. Learn more in this week’s New York Business Divorce.
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