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Bordereaux v. Salomon Smith Barney HDG

Appellate Division of the Supreme Court of New York, First Department
Feb 17, 2000
269 A.D.2d 217 (N.Y. App. Div. 2000)

Opinion

February 17, 2000

Judgment, Supreme Court, New York County (Beatrice Shainswit, J.), entered April 14, 1999, dismissing plaintiff's complaint, and bringing up for review an order, same court and Justice, entered April 8, 1999, which granted defendants' motion pursuant to CPLR 3211 to dismiss the complaint, unanimously affirmed, without costs. Appeal from the aforesaid order entered April 8, 1999, unanimously dismissed, without costs, as subsumed within the appeal from the ensuing judgment.

Benjamin Y. Kaufman, for plaintiff-appellant.

Francis P. Barron, for defendants-respondents.

SULLIVAN, J.P., ELLERIN, BUCKLEY, FRIEDMAN, JJ.


Plaintiff, an HBO Company (HBO) shareholder, brought this action, allegedly on behalf of similarly situated HBO shareholders, to recover damages for defendants' premature disclosure of a pending merger between HBO and McKesson Corporation. He alleges that, in consequence of defendants' premature disclosure, HBO's stock plummeted in value and the proposed merger with McKesson was aborted, resulting in further loss of opportunities and benefits to HBO. The claims asserted by plaintiff, however, clearly belong to the corporation, and, accordingly, may only be asserted derivatively (Abrams v. Donati, 66 N.Y.2d 951, 953). Plaintiff has alleged no facts to justify permitting him to proceed with this lawsuit except on the corporation's behalf (cf., Hammer v. Werner, 239 App. Div. 38), and, in particular, may not, as a shareholder, claim third-party beneficiary status under the consulting agreement between defendant Salomon Smith Barney and HBO, which, by its terms, explicitly stated that defendant investment group's duty under the engagement was to the corporation alone (see,Edward B. Fitzpatrick, Jr. Constr. Corp. v. County of Suffolk, 138 A.D.2d 446, 449-450, lv denied in part and dismissed in part 73 N.Y.2d 807. Thus, any alleged intention to give the shareholders an enforceable right of action is negated (see, Artwear, Inc. v. Hughes, 202 A.D.2d 76, 81-84).

Plaintiff's additional arguments have been considered and found unavailing.

THIS CONSTITUTES THE DECISION AND ORDER OF SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.


Summaries of

Bordereaux v. Salomon Smith Barney HDG

Appellate Division of the Supreme Court of New York, First Department
Feb 17, 2000
269 A.D.2d 217 (N.Y. App. Div. 2000)
Case details for

Bordereaux v. Salomon Smith Barney HDG

Case Details

Full title:ROBERT BORDEREAUX, etc., Plaintiff-Appellant, v. SALOMON SMITH BARNEY…

Court:Appellate Division of the Supreme Court of New York, First Department

Date published: Feb 17, 2000

Citations

269 A.D.2d 217 (N.Y. App. Div. 2000)
703 N.Y.S.2d 112

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