Patrick D. Egan of Winget, Spadafora & Schwartzberg LLP’s New York office secured the pre-answer dismissal of a shareholder derivative action filed in the Supreme Court of the State of New York, Nassau County. The plaintiff, an aggrieved condominium unit owner, filed a complaint asserting eleven derivative claims (largely involving alleged self-dealing and failure to observe corporate formalities) against the collective defendants, including our clients, who were current and/or former members of the condominium’s board of managers. In lieu of filing an answer to plaintiff’s complaint and subsequently engaging in protracted and costly litigation, we filed a pre-answer motion to dismiss, arguing that the plaintiff’s derivative action was barred by the business judgment rule. We further argued that the plaintiff should not be permitted to circumvent unfavorable rulings in prior matters filed against our clients (that we likewise had dismissed) instead of filing an appeal. After oral argument, the Court granted our pre-answer motion and dismissed plaintiff’s complaint in its entirety.
Subsequent thereto, the plaintiff filed a Notice of Appeal, but failed to timely perfect said appeal. The plaintiff filed a motion seeking to vacate the Appellate Division’s dismissal of the appeal, which we opposed. The Appellate Division (Second Department) denied plaintiff’s motion.
This matter was handled by Patrick D. Egan, a partner in the New York office of Winget, Spadafora & Schwartzberg, LLP. He can be reached at egan.p@wssllp.com.
