|
Case Law—State
Peter H. Agrapides, MBA, AVA
Summary:
In Keil v. Keil, the plaintiff wife files a
divorce action challenging an order of the Supreme Court,
Columbia County (New York). The court generally distributed the
marital property on a 50/50 basis. At issue: the value of a
family business (which the wife claimed the court incorrectly
valued) and the distribution of funds in an account the wife had
funded with premarital earnings. Find out how the judge rules!
The Matter of Burnfield v. Kurilenko concerns a
dentist practice run by two partners, one of whom dies. The
decedent’s wife, acting as estate executor, finds a prospective
buyer. The other partner, however, refuses to sell. His claim is
that the estate executor, as a nonprofessional who was the
transferee of a majority of shares in the P.C., lacked standing
to obtain judicial dissolution of the corporation pursuant to
Business Corporation Law § 1103. See what happens.
|
Keil v. Keil
2011 NY Slip. Op 4562
June 2, 2011
Judge Spain
Keywords:
valuation, marital residence, statutory factors, market value, key
role, distributing, commencement, furnishings, disability, nontitled,
disturbed, improved, factored, discern, abused, family business
Summary:
Plaintiff wife filed a divorce action against defendant husband. She
challenged an order of the Supreme Court, Columbia County (New
York), which generally distributed the marital property on a 50/50
basis, awarded the wife non-durational maintenance, and denied her
request for counsel fees.
The court of appeals held that the Supreme Court did not abuse its
discretion in awarding the wife $57,500, or the greater share of the
$75,000 in improvements made on the marital residence during the
marriage. Neither party presented any expert testimony to
demonstrate the value of the property at the start or at the end of
the marriage. The husband acquired the marital residence before the
marriage and never added the wife's name to the deed. Thus, it was
his separate property, Domestic Relations Law § 236(B)(1)(d)(1).
The Supreme Court erred in distributing as marital property the
funds of an account the wife funded with premarital earnings. The
account was the wife's separate property and not subject to
equitable distribution.
Fifty percent of farm property was marital property, of which the
wife was entitled to one half. During the marriage, the parties
improved the farm with marital funds, and the wife made non-economic
contributions to the improvement and development of the farm.
Given that the wife's expert had already reduced the value of the
family business based on the husband's key role in the business, the
Supreme Court erred in further reducing the value. The court of
appeals reversed the portion of the judgment ordering equitable
distribution of the wife's account, awarding the wife 15 percent of
the value of the farm, and reducing the value of the family business
by 20 percent. The wife was entitled to 25 percent of the value of
the farm, subject to a credit to the husband, and the wife was
entitled to 50 percent of an expert's appraised value of the
business.
Matter of Burnfield v. Kurilenko
2011 NY Slip Op 5071
June 7, 2011
Judge Leventhal
Keywords:
shareholder, dissolution, nonprofessional, operation of law, book
value, entitled to vote, election of directors, dissolve,
outstanding shares, transferee, professional service
Summary:
Petitioner estate executor sought judicial dissolution of a
professional service corporation (P.C.) pursuant to Business
Corporation Law § 1103. The Supreme Court, Queens County (New York),
granted respondent shareholder's motion to dismiss the petition
pursuant to CPLR 3211(a). The estate executor appealed. The
shareholder and the decedent, both dentists, were the only
shareholders in the P.C.
The decedent held 75 percent of the outstanding shares, and the
shareholder held the remaining 25 percent. Following the decedent's
death, the estate executor, the decedent's wife, hired a business
broker to help sell the P.C. When a dentist offered to purchase the
P.C., the estate executor attempted to vote to dissolve the P.C.,
approve the sale, and appoint the prospective buyer as business
manager of the P.C.
The shareholder, however, disagreed with the sale. The estate
executor, as a nonprofessional who was the transferee of a majority
of shares in the P.C., lacked standing to obtain judicial
dissolution of the corporation pursuant to Business Corporation Law
§ 1103. Business Corporation Law § 1511 only permitted a
non-professional shareholder to vote on corporate action pursuant to
either Business Corporation Law §§ 909 or 1001.
Therefore, there was no basis upon which to grant the estate
executor's request to permit the sale. Finally, the shareholder's
offer to purchase the estate executor's shares for book value of $0
was more properly raised in an action to compel purchase or
redemption. The court affirmed the judgment.
Peter H. Agrapides, MBA, AVA, is a Principal at
Western Valuation Advisors, which has offices in Salt Lake City,
Utah and Las Vegas, Nevada. For more information, write Peter
directly, or call (801) 273-1000.
|
|
