Legal Question in Business Law in New York

STATE OF NEW YORK - Business Corporate Law

Section 1104-a:

Petition for judicial dissolution under special circumstances

(a)

The holders of shares representing twenty percent or more of the votes of all outstanding shares of a corporation .....entitled to vote in an election of directors may present a petition of dissolution

NOTE - All questions are based on that only petitioners with voting rights are allowed to initiate and/or execute a petition. If you do not have voting rights than you are not entiled to present a petition.

QUESTION - Is this correct?

QUESTION - Does each (petitioner) holder of shares has to have 20% or more in order to initiate and/or execute a petition?

QUESTION - Can multiple (petitioners) holders of shares that do not have 20% or more initiate and/or execute a petition as long as the total number of petitioners initiating and/or executing a petition equals 20% of more when all their shares are totaled?

Section 1104-a (a) (1)

The directors or those in control of the corporation have been guilty of illegal, fraudulent or oppressive actions toward the complaining shareholders;

QUESTION - Who defines the guilty of illegal actions? Does the court have to define the guilt for each of the (3) categories, before the filling of the petition can take place?

QUESTION - What is oppressive actions? Please provided several examples?

Thanks


Asked on 1/06/14, 7:12 am

2 Answers from Attorneys
Frank Natoli Natoli-Legal, LLC

This site is for general legal insights not specific and actionable legal advice. For that you will have to consult a lawyer in private.

If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.

Kind regards,

Frank

www.LanternLegal.com

866-871-8655

[email protected]

DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.

Read more
Answered on 1/06/14, 7:18 am
Kevin Connolly Kevin J. Connolly

Yes, it's correct. this is the law.

The petitioners need to have 20% of the votes collectively.

Any one of the three--illegal OR fraudulent OR oppressive--will suffice. There are many examples. For example, the "control group" might decide to withhold all dividends while paying themselves inflated salaries. Or they might use corporate assets to buy assets from the control group and pay more than fair market value.

Read more
Answered on 1/10/14, 4:05 am


Related Questions & Answers

More Business Law questions and answers in New York