IN RE: the Petition of Paul Adler (2026)

The following papers numbered 1 - 2 were read and considered as to Petitioner's Order to Show Cause (Motion Seq. No. 1) for an Order: (a) directing and ordering Respondents to comply with their obligations under Business Corporation Law § 624 and the common law to permit Petitioner, his attorneys, and authorized agents to inspect and copy, at their expense, all books and records of the corporations as demanded in Petitioner's written request dated April 29, 2026; (b) directing and requiring Respondents pursuant to Civil Practice Law and Rules § 7803(1) to permit Petitioner to inspect and copy the records of the respondent corporations at such time and place as may be set by the court; (c) awarding petitioner the costs and disbursements of this action as permitted by law; and (d) granting Petitioner such other and further relief as to the Court seems just and proper:

PAPERS NUMBERED

Petition/Exhibits A-C/Order to Show Cause (Motion Seq. No. 1) 1

Affirmation of Jon P. Devendorf, Esq./Exhibit A — Verified Answer 2

I. PRELIMINARY STATEMENT

This special proceeding was commenced by Petitioner Paul Adler ("Petitioner") by Verified Petition and Order to Show Cause, filed July 23, 2026, seeking an order pursuant to Business Corporation Law (hereinafter "BCL") § 624 and the common law compelling Respondents Lawrence Adler (hereinafter "Respondent Adler"), Siblings Enterprises Ltd. (hereinafter "Siblings Enterprises"), and Siblings 303 Associates, Ltd. (hereinafter "Siblings 303") (collectively, "Respondents") to produce for inspection and copying an extensive set of corporate books and records of the two corporate Respondents, spanning fiscal years 2018 through 2025. Respondents oppose the application in its entirety, contending that the proceeding is procedurally defective, that the demand exceeds the scope of Business Corporations Law § 624, and that the material factual predicate of the Petition — that Petitioner has received no information concerning the corporate Respondents — is false.

For the reasons that follow, the Court finds that the papers raise genuine and material issues of fact, foremost among them whether Petitioner is, and was as of the date of his demand, a shareholder of record of either corporate Respondent — a threshold question upon which his entitlement to any relief, statutory or common-law, entirely depends. Those issues cannot be resolved on the conflicting papers submitted. Respondents' application to dismiss the Petition is DENIED, and the Petition is held in abeyance pending a hearing, as set forth in the accompanying Order.

II. THE PAPERS BEFORE THE COURT AND CONSIDERED

The Court has considered: (1) the Verified Petition, filed July 23, 2026 (See NYSCEF Doc. No. 1), with Exhibits A, B, and C annexed thereto (See NYSCEF Doc. Nos. 2, 3, and 4); and (2) the Attorney Affirmation in Opposition of Jon P. Devendorf, Esq., filed August 10, 2026 (See NYSCEF Doc. No. 20), together with the Verified Answer to Petition annexed thereto as Exhibit A (See NYSCEF Doc. No. 21).

The Devendorf Affirmation repeatedly refers to "the accompanying Affirmation of Respondent Adler" and "the accompanying Affirmation of Lawrence Adler" as the evidentiary source for Respondents' central contention that Petitioner has, in fact, regularly received corporate information. See Devendorf Aff. ¶ 10; See Verified Answer ¶ 52, 55. Opposition papers, per the parties' stipulation, were due on August 10, 2026, and no affirmation of Lawrence Adler was furnished to the Court as part of the record on that date. The Court's determination is accordingly made on the papers properly filed within the time constraints set by the parties themselves. To the extent Respondents intend to rely on Respondent Adler's personal affirmation, it must be properly filed, and it will be considered — together with any answering submission from Petitioner — at the hearing directed below.

III. FACTUAL AND PROCEDURAL BACKGROUND

A. The Parties

Petitioner alleges that he is a shareholder of Siblings Enterprises and Siblings 303, two New York business corporations he alleges are controlled by his brother, Respondent Adler, and that maintain their principal offices in Rockland County. See Petition ¶¶ 9-12. Respondents admit that Petitioner and Respondent Adler are brothers and that Respondent Adler resides in Florida, but deny knowledge sufficient to form a belief as to whether Petitioner is a shareholder, asserting that Petitioner did not list any interest in the corporate Respondents on a bankruptcy schedule and expressed uncertainty over holding an interest at his deposition in litigation now pending on appeal before this Court's Appellate Division. See Answer ¶¶ 9, 12, 14. Respondents further allege that the principal offices of both corporate Respondents are in Florida, not Rockland County. See Answer ¶¶ 10, 11, 13.

Respondents also allege that prior to 2019, Petitioner and a third individual, Robert Adler, were in possession and control of all corporate records of Siblings Enterprises and Siblings 303 to the exclusion of Respondent Adler and his sisters Arlene, Judy, and Lisa, and that Petitioner and Robert Adler improperly acted for self-gain during that period. See Answer ¶ 12.

B. The April 29, 2026 Demand

By letter dated April 29, 2026, Petitioner's counsel demanded, on Petitioner's behalf and pursuant to BCL § 624 and the common law, an accounting of the corporate Respondents' finances from January 1, 2018 through the date of the demand, together with fourteen enumerated categories of bo2018,and records, including, among others: annual and interim balance sheets and profit-and- loss statements for fiscal years 2018 through 2025; financial ledgers and federal and state tax returns for the same period; records of distributions to shareholders; records of the corporations' real property holdings and leases; agreements by which the corporations lent money to any shareholder; minutes of shareholder proceedings from January 1, 2018 through the date of the demand; and a complete shareholder list and transfer history. See Petition ¶¶ 20-22; Ex. A. The demand was accompanied by Petitioner's affidavit pursuant to BCL § 624(c). See Petition ¶ 19; Ex. A. Respondents do not challenge the sufficiency or veracity of that affidavit.

C. Respondents' Response and the Referral to the Corporate Accountant

Respondent Adler replied by email dated May 29, 2026, stating that "most if not all of the information requested has always been available to Paul" and could be obtained from the corporate accountant, William Carbonari of WestRock Tax and Consulting, and that Respondent Adler — then overseas — would "address any remaining issues" after his return on June 10, 2026. See Petition ¶ 25; Ex. B. Respondents admit sending this email, "including the specific authorization provided by Respondent Adler for Petitioner to obtain information from his close friend and the accountant Bill Carbonari." See Answer ¶¶ 25-26.

On or about July 14, 2026, Mr. Carbonari provided Petitioner's counsel with balance sheets and profit-and-loss statements for Siblings 303 for fiscal years 2018, 2020, 2022, and 2024, and tax returns for both corporate Respondents for 2018 through 2024. See Petition ¶ 28. By letter dated July 16, 2026, Petitioner's counsel advised that the materials produced did not satisfy the balance of the April 29, 2026 demand and requested the remaining documents by July 22, 2026. See Petition ¶ 29; Ex. C. Respondents deny receiving that letter. See Answer ¶¶ 29-30. Respondents have produced no further documents since July 14, 2026. See Petition ¶ 30.

D. This Proceeding and Respondents' Opposition

Petitioner commenced this proceeding by Order to Show Cause and Verified Petition, filed July 23, 2026, asserting two causes of action: the first for inspection and copying of the corporate Respondents' books and records pursuant to BCL § 624; the second for the same relief under the common law, which the Petition alleges is "broader than the statutory right." See Petition ¶ 39.

Respondents oppose on several grounds. First, they argue that mandamus relief under Civil Practice Law and Rules § 7803(1) is unavailable against private individuals and corporations. See Devendorf Aff. ¶ 6. Second, they argue that the demand "far exceeds the express parameters of the BCL," which they characterize as reaching only "discrete records (i.e. shareholder names/info, meeting minutes and financial statements)." See Devendorf Aff. ¶ 7. Third, they contend that the common-law cause of action is unsupported by any actual showing of entitlement. See Devendorf Aff. ¶ 8. Fourth, and centrally, they contend that Petitioner's core factual allegation — that he "has received no information" about the corporate Respondents since Respondent Adler assumed control — is "knowingly false," pointing to the tax-return and financial-statement production described above and to unspecified "dozens of communications" allegedly sent to Petitioner over the years. See Devendorf Aff. ¶ 10; Answer ¶¶ 3, 21-23. Fifth, they assert that Petitioner's status as a shareholder is itself in doubt. See Answer ¶¶ 9, 12, 14. Sixth, they assert affirmative defenses of documentary evidence, unclean hands, and access to an alternative source of the information. See Answer, Affirmative Defenses First through Sixth.

IV. DISCUSSION

A. The Petition Is Not Subject to Dismissal Because It Invokes Civil Practice Law and Rules § 7803(1)

Article 78 was designed to facilitate requests for relief based on the common law writs of mandamus, prohibition, and certiorari without regard to the technical distinctions between them. See Newbrand v City of Yonkers, 285 NY 164, 174 (1941). "In most Article 78 proceedings, agents of state and local government are the named respondents because the writs evolved primarily as mechanisms to control governmental action." Alexander, Vincent C., Practice Commentaries, Civil Practice Law and Rules § 7802. However, the reach of Article 78 is far broader. "Historically, a writ of mandamus has been made applicable to corporations, both public and private, because these institutions are creations of the government and 'a supervisory or visitorial power is always impliedly reserved to see that corporations act agreeably to the end of the institution, that they keep within the limits of their lawful powers, and to correct and punish abuses of their franchises.' " Gray v Cansius College of Buffalo, 76 A2d 30, 33 [4th Dept 1980] quoting Matter of Weidenfield v Keppler, 82 NYS 634, 636 [1st Dept 1903]. Further, the intention for Article 78 to be applicable to corporations is evidenced by its inclusion in the definition of a body that is subject to Article 78 review: "every court, tribunal, board, corporation, officer, or other person or aggregation of persons, whose action may be affected by a proceeding under this article." Civil Practice Law and Rules § 7802(a).

Thus, consistent with the legislative intent, the statute on its face expressly applies to certain non-governmental bodies, including corporations, that become quasi-governmental bodies based upon their acceptance and creation pursuant to the statutory authority. See id; See e.g.. In re Dicker v Glen Oaks Village Owners, Inc., 153 AD3d 1399, 1400-1401 [2d Dept 2017) ("a proceeding to review a determination of a board of a cooperative apartment may properly be commenced pursuant to CPLR article 78.").

Corporations therefore can be compelled in an Article 78 action to fulfill statutory obligations set forth by the state and/or municipalities but also obligations imposed by their internal rules. For example, in Matter of Auer v Dressel, 306 NY 427 [1954] an Article 78 mandamus was determined to be an appropriate method to compel a corporation to comply with its by-laws regarding convening of a special meeting upon demand of the majority of shareholders. Also, in Crane Co. v Anaconda Co., 39 NY2d 14,18 [1976] an Article 78 mandamus was proper to compel a shareholder's right to inspect corporate books and records pursuant to Business Corporation Law § 624 et seq. Recently, in Galasso v Cobleksill Stone Products, Inc., 73 Misc 3d 1231(A) (Sup Ct, Albany County 2021), a minority shareholder employed an Article 78 to compel inspection of a corporation's financial statements and income tax returns pursuant to Business Corporation Law § 624.

Nonetheless, assuming arguendo that the Article 78 is not the proper vehicle upon which Petitioner should have brought the instant action, Civil Practice Law and Rules § 103(c) provides that, once a court has obtained jurisdiction over the parties, a civil judicial proceeding "shall not be dismissed solely because it is not brought in the proper form," and directs the court instead to "make whatever order is required for its proper prosecution." Courts have declined to dismiss proceedings styled as Article 78 applications where, as here, an independent statutory vehicle exists to grant the same relief on the same summary basis. See Matter of Schmidt, 97 AD2d 244 [2d Dept 1983] [applying Civil Practice Law and Rules § 103(c) to treat a mislabeled Article 78 proceeding as a proper application under Business Corporation Law § 619].)

Here, that independent vehicle is BCL § 624(d) itself, which authorizes the person making an inspection demand to apply to the supreme court in the judicial district where the corporation's office is located for an order directing the corporation, its officer, or agent to show cause why inspection should not be permitted; directs the court to hear the parties summarily, by affidavit or otherwise, on the return date; and, if it appears the applicant is qualified and entitled to inspection, to grant an order compelling it and awarding such further relief as may be just and proper. That statutory procedure — commencement by order to show cause, summary determination on the papers, and a compel order upon a showing of entitlement — is functionally indistinguishable from the mandamus procedure Respondents insist is unavailable. The Petition expressly and independently invokes BCL § 624(d) as a basis for relief. See Petition ¶¶ 1, 4-7.

B. The Governing Legal Framework: Statutory and Common-Law Rights of Inspection

New York recognizes two distinct, coexisting sources of a shareholder's right to inspect corporate books and records: the statutory right codified in BCL § 624, and the common-law right that predates and survives it. See Matter of Crane Co. v Anaconda Co., 39 NY2d at 18-20; See also Matter of Peterborough Corp. v Karl Ehmer, Inc., 215 AD2d 663, 664 [2d Dept 1995].)

1. The Statutory Right

BCL § 624(b) entitles any person who shall have been a shareholder of record of a corporation, upon at least five days' written demand, to examine its minutes of the proceedings of its shareholders and record of shareholders, including beneficial-ownership information in the corporation's possession, for any purpose reasonably related to the person's interest as a shareholder. Inspection under paragraph (b) may be conditioned on the shareholder furnishing the affidavit required by paragraph (c), attesting that the inspection is not sought for an improper purpose and that the shareholder has not, within five years, trafficked in shareholder lists. BCL § 624(e) separately entitles any shareholder, upon written request, to be given or mailed an annual balance sheet and profit-and-loss statement for the preceding fiscal year and, if distributed to shareholders or otherwise made public, the most recent interim balance sheet or profit-and-loss statement.

Where a shareholder satisfies these minimum statutory requirements and furnishes the required affidavit, the right of inspection under paragraphs (b) and (e) is close to absolute; the Legislature adopted § 624 in order to expand upon the common law by dispensing with any need to show a "proper purpose." See Crane Co., 39 NY2d at 20.

2. The Common-Law Right

BCL § 624(f) provides that nothing in the statute "shall impair the power of courts to compel the production for examination of the books and records of a corporation." That provision preserves the pre-statutory common-law right of a shareholder — recognized in this State since at least the nineteenth century — to inspect all of a corporation's books and records, not merely the discrete categories enumerated in paragraphs (b) and (e), upon a showing that the inspection is sought in good faith and for a purpose reasonably related to the shareholder's interest. See Crane Co., 39 NY2d at 18-20; See also Matter of Peterborough Corp., 215 AD2d at 664; Matter of Tatko v Tatko Bros. Slate Co., 173 AD2d 917, 918 [3d Dept 1991]. Investigating suspected mismanagement, breach of fiduciary duty, or self-dealing is, on its face, a proper purpose for a common-law inspection demand, even if the inspection ultimately reveals no wrongdoing. See Retirement Plan for Gen. Emps. of City of N. Miami Beach v McGraw-Hill Cos., 120 AD3d 1052, 1056 [1st Dept 2014].

C. The Scope of the Demand Measured Against the Statute

Measured against this framework, Respondents' objection that the April 29, 2026, demand "far exceeds the express parameters of the BCL" is well taken in part. The demand's fourteen enumerated categories reach considerably beyond the minutes of shareholder proceedings, and the shareholder list addressed by paragraph (b): financial ledgers, tax returns, distribution records, real-property records, leases, and shareholder-loan agreements for an eight-year period (see Ex. A, Items 5-10) find no footing in the literal text of paragraph (b), and the request for eight years of annual balance sheets and profit-and-loss statements (see Ex. A, Items 1-2) exceeds even paragraph (e), which by its terms reaches only "the preceding fiscal year." Those categories, if they are to be produced, must rest on the common-law right preserved by BCL § 624(f) and pleaded as the Petition's second cause of action, which requires a showing of good faith and proper purpose that paragraphs (b) and (e) do not.

The shareholder-list, transfer-history, and beneficial-ownership categories (see Ex. A, Items 12-14) and the demand for minutes of shareholder proceedings (see Ex. A, Item 11), by contrast, fall squarely within paragraph (b), for which Petitioner has furnished the affidavit required by paragraph (c) and which Respondents have not challenged as false. Nor do Respondents contend, on this record, that any of those four categories have ever been produced to Petitioner; the production Respondents describe consists of tax returns and Siblings 303 financial statements only. See Answer ¶¶ 21-23, 25-28.)

D. The Threshold, Case-Dispositive Dispute: Petitioner's Status as a Shareholder of Record

Whatever the ultimate scope of Petitioner's entitlement, both the statutory and common- law rights of inspection belong only to a shareholder, or shareholder of record. See BCL § 624[b]; See also Crane Co., 39 NY2d at 18. Respondents' Verified Answer denies knowledge sufficient to form a belief as to Petitioner's shareholder status, and alleges that Petitioner "did not list any interest in these entities during his bankruptcy filing and further expressed uncertainty over holding an interest at his deposition" in litigation now pending before the Appellate Division, and further asserts that whatever interest Petitioner may hold "is subject to monies owed by him to the Respondents." See Answer ¶¶ 9, 14.¹

This is not a bare or conclusory denial of the kind a court may disregard on a summary application. It identifies a specific, extrinsic source — sworn bankruptcy schedules and deposition testimony in a separate, identified proceeding — bearing directly on the very fact the Petition assumes throughout: that Petitioner is a shareholder of both corporate Respondents. That assertion cannot be resolved on the papers alone, and it cannot be credited or discredited on the strength of the parties' competing verified pleadings, which is all the current record supplies. A triable issue of fact requires a trial, not a choice between affidavits. See Matter of Pharmacia & Upjohn Co. [Elan Pharms., Inc.], 10 AD3d 331, 334 [1st Dept 2004].

Civil Practice Law and Rules § 409(b) directs that, on a special proceeding such as this one, the court "shall make a summary determination upon the pleadings, papers and admissions to the extent that no triable issues of fact are raised." Where, as here, a triable issue is raised, Civil Practice Law and Rules § 410 supplies the remedy: the issue "shall be tried forthwith and the court shall make a final determination thereon." Because Petitioner's status as a shareholder of record is foundational to both causes of action — a fact without which neither the statutory nor the common- law right of inspection exists — the Court cannot grant the Petition, in whole or in part, without first resolving that issue.

E. Additional Disputed Issues Bearing on the Common-Law Branch

To the extent the second cause of action ultimately requires Petitioner to establish good faith and a proper purpose for the categories of records that exceed paragraphs (b) and (e), Respondents have raised further disputed issues bearing on that showing: their contention that Petitioner has, in fact, "regularly" received corporate financial information (see Answer ¶¶ 3, 21- 23), and their affirmative defenses asserting documentary evidence, unclean hands arising from Petitioner's alleged pre-2019 control of the corporate records, and Petitioner's admitted access to the corporate accountant. See Answer, Affirmative Defenses First through Sixth. Investigating suspected mismanagement and self-dealing is, on its face, a proper purpose (see McGraw-Hill Cos., 120 AD3d at 1056), and a shareholder's prior access to some information does not necessarily defeat a demand for the remainder; but the Court cannot determine, on this record, how much of the demanded material — if any — Petitioner has already obtained, or whether Respondents' broader allegations of prior self-dealing bear materially on the good-faith showing the common- law branch requires. Those questions, too, are appropriately explored at the hearing directed below, together with the threshold question of shareholder status, rather than resolved on the conflicting, and in significant part conclusory, assertions of the current papers.

The Court notes, without deciding, Respondents' assertion that the principal offices of the corporate Respondents are in Florida rather than Rockland County. See Answer ¶¶ 10, 11, 13. Improper venue is not a jurisdictional defect and is ordinarily raised, if at all, by motion pursuant to Civil Practice Law and Rules § 511; Respondents have made no such motion, and the Court does not treat the venue allegation in the Answer as requiring resolution on this application. Petitioner's residence in Rockland County is undisputed.

V. CONCLUSION

The Petition raises genuine and material issues of fact — foremost among them, Petitioner's status as a shareholder of record of Siblings Enterprises and Siblings 303 — that preclude summary determination in either party's favor under Civil Practice Law and Rules § 409(b). Respondents' application to dismiss the Petition is denied. The Petition is held in abeyance, and this matter is set down for a hearing pursuant to Civil Practice Law and Rules § 410, as set forth below.

Accordingly, it is hereby

ORDERED that Respondents' application to dismiss the Verified Petition is DENIED; and it is further

ORDERED that the Verified Petition is held in abeyance pending a hearing, on August 13, 2026 at 11 a.m., on the following issue: whether Petitioner Paul Adler was, as of April 29, 2026, and remains, a shareholder of record of Siblings Enterprises Ltd. and/or Siblings 303 Associates, Ltd.; and it is further

ORDERED that, at the hearing directed above, the parties shall also be prepared to address: (i) the specific categories of books and records enumerated in Petitioner's April 29, 2026 demand that have, and have not, been produced to Petitioner, with documentary substantiation; and (ii) Petitioner's purpose in seeking the categories of records that fall outside Business Corporation Law § 624(b) and (e); and it is further

ORDERED that, if Respondents intend to rely upon the affirmation of Respondent Lawrence Adler referred to in the Affirmation of Jon P. Devendorf, Esq., filed August 10, 2026, Respondents shall file that affirmation with the Court and serve it upon Petitioner's counsel on or before August 12, 2026; and it is further

ORDERED that this determination is without prejudice to renewal of Petitioner's application for the categories of relief specified in Business Corporation Law § 624(b) upon resolution of the threshold issue set forth above.

This constitutes the Decision and Order of the Court .

Dated: August 11, 2026

New City, New York

HON. JOHN P. COLLINS, JR., J.S.C.

FOOTNOTES

1.   The Verified Answer alleges the existence of a bankruptcy filing in two separate paragraphs. TheisCourt is not aware of, nor is there anything in the record before it of an alleged bankruptcy filing by the Petitioner.

John P. Collins, Jr., J.