IRENE DAVID REALTY INC v. 121

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IRENE DAVID REALTY, INC., et al., Plaintiffs–Respondents, v. David MOYAL, et al., Defendants–Appellants, 121 Varick Street Corp., Nominal Defendant–Appellant.

Decided: January 21, 2016

SWEENY, J.P., RENWICK, MANZANET–DANIELS, GISCHE, JJ. White Fleischner & Fino, LLP, New York (Gil M. Coogler of counsel), for appellants. Sternbach, Lawlor & Rella LLP, New York (Anthony J. Rella of counsel), for respondents.

Order, Supreme Court, New York County (Geoffrey D. Wright, J.), entered on or about April 21, 2015, which denied defendants' motion for summary judgment dismissing the complaint, unanimously affirmed, with costs.

Plaintiffs, minority shareholders in 121 Varick Street Corp. (Varick), a commercial cooperative corporation, allege that defendant Moyal, as president of the board of directors, engaged in self-dealing and breached his fiduciary duties through a series of transactions where he, among other things, surreptitiously and without board approval obtained majority control of the cooperative, pressured the board of directors into approving loans for an unnecessary electricity upgrade in the building, and entered into subleases providing him and the entities he controlled with a substantial profit. Defendants sought summary judgment dismissing the complaint, which the IAS court denied. We affirm.

This Court noted, on plaintiffs' prior motion for partial summary judgment on their claims, that issues of fact exist concerning whether defendants as a whole, and Moyal in particular, “exceeded the protection of the business judgment rule” (107 AD3d 430, 431 [2013] ). Defendants have presented neither argument nor evidence sufficient to alter this determination.

We have considered defendants' remaining arguments and find them unavailing.