Court Finds that Neutral Receiver Should be Appointed where Corporate Shareholders are Hostile Toward One Another

By Lewis Tesser, Partner, and Timothy Nolen, Associate

A case from the New York County Supreme Court demonstrates how courts weigh appointment of neutral receivers when corporations are dissolved. The case concerned issues of business law and civil practice.

The case, Matter of Dziomba, 2011 N.Y. Misc. LEXIS 4133 (Sup. Ct. N.Y. County, August 22, 2011), involved two shareholders in a corporation who were hostile toward one another.  Because of the conflicts between the two shareholders and because of the corporation’s substantial debt, the majority shareholder sought dissolution of the corporation and appointment of a neutral receiver to preserve the corporation’s property.  The minority shareholder did not oppose the dissolution but petitioned the court to be appointed as receiver. The Court rejected the minority shareholder’s position,  noting that a neutral receiver is preferable when there is “hostility between the two shareholders.”

At Tesser, Ryan & Rochman, our attorneys have years of experience litigating and negotiating disputes between corporate shareholders, officers or directors. We can work with clients to achieve a successful resolution to such disputes.