IN RE: Anthony RIZZOTTO (2026)

DECISION & ORDER

A/

In a proceeding, inter alia, pursuant to Business Corporation Law § 1104–a for the judicial dissolution of a closely held corporation, the petitioner appeals from an order of the Supreme Court, Nassau County (Jerome C. Murphy, J.), entered May 24, 2024.  The order, insofar as appealed from, denied, without a hearing, that branch of the petition which was for judicial dissolution of Manhasset Collision, Ltd.

ORDERED that the order is reversed insofar as appealed from, on the law, with costs, and the matter is remitted to the Supreme Court, Nassau County, for further proceedings in accordance herewith.

In 2020, the petitioner purportedly acquired from the respondent a 25% interest in Manhasset Collision, Ltd. (hereinafter MCL).  The respondent allegedly retained the remaining 75% outstanding shares of stock.  In 2024, the petitioner commenced this proceeding against the respondent, inter alia, for judicial dissolution of MCL pursuant to Business Corporation Law § 1104–a.  The respondent opposed.  In an order entered May 24, 2024, the Supreme Court, among other things, denied, without a hearing, that branch of the petition which was for judicial dissolution of MCL. The petitioner appeals.

“Business Corporation Law § 1104–a empowers a holder of 20% or more of the stock of a closely held corporation, like the plaintiff here, to seek dissolution of the corporation on the ground that those in control have committed ‘oppressive actions toward the complaining shareholders’ ” (Qadan v. Tehseldar, 139 A.D.3d 1036, 1036–1037, 32 N.Y.S.3d 285, quoting Business Corporation Law § 1104–a[a][1] ) or that “[t]he property or assets of the corporation are being looted, wasted, or diverted for non-corporate purposes by its directors, officers or those in control of the corporation” (Business Corporation Law § 1104–a[a][2] ).  In a proceeding pursuant to Business Corporation Law § 1104–a, “[t]he appropriateness of an order of dissolution is in every case vested in the sound discretion of the court considering the application” (Matter of Kemp & Beatley [Gardstein], 64 N.Y.2d 63, 73, 484 N.Y.S.2d 799, 473 N.E.2d 1173), and “[a] court has broad latitude in fashioning alternative relief” (id.;  see Matter of Burack [I. Burack, Inc.–Burn–Rite Valve Mfg. Corp.], 137 A.D.2d 523, 527, 524 N.Y.S.2d 457).

Here, the Supreme Court should not have denied that branch of the petition which was for judicial dissolution of MCL pursuant to Business Corporation Law § 1104–a without conducting a hearing.  The allegations in the verified petition and its supporting papers were prima facie sufficient to establish a basis for judicial dissolution pursuant to Business Corporation Law § 1104–a (see Qadan v. Tehseldar, 139 A.D.3d at 1036, 32 N.Y.S.3d 285;  Matter of Williamson v. Williamson, Picket, Gross, 259 A.D.2d 362, 687 N.Y.S.2d 53).  In light of the conflicting claims by the parties regarding the relevant facts, the court should have conducted a hearing before determining whether judicial dissolution was warranted (see Matter of Nicastro v. VJN Real Estate Corp., 175 A.D.3d 1296, 1298, 109 N.Y.S.3d 104;  Matter of Giordano v. Stark, 229 A.D.2d 493, 494, 645 N.Y.S.2d 517).

Accordingly, we reverse the order insofar as appealed from and remit the matter to the Supreme Court, Nassau County, for further proceedings in accordance herewith.

IANNACCI, J.P., DOWLING, LANDICINO and LOVE, JJ., concur.