Summary
In Brittania 54 Hotel Corp. v. Freid, 673 N.Y.S.2d 668, 668 (App.Div. 1st Dep't 1998), the defendant was denied an advance award of litigation expenses under § 724(c) despite his assertion that he was an officer of the corporation in light of "compelling documentary evidence" submitted by the plaintiff to the contrary.
Summary of this case from Booth Oil Site Adm. Gr. v. Safety-Kleen Corp.Opinion
June 4, 1998
Appeal from the Supreme Court, New York County (Leland DeGrasse, J.).
Section 722 Bus. Corp. of the Business Corporation Law permits a corporation to indemnify a past or present officer for his reasonable litigation expenses when he is sued by reason of the fact that he was an officer, i.e., for his actions taken as an officer. When a corporation declines to afford indemnification pursuant to Business Corporation Law § 722 Bus. Corp., the officer may apply to the court, which may direct that such payments be made "if the court shall find that the defendant has by his pleadings or during the course of the litigation raised genuine issues of fact or law" (Business Corporation Law § 724 Bus. Corp. [c]).
Defendant's submissions were insufficient to raise a genuine issue of fact regarding his assertion that he held the office of president or chief executive officer in plaintiff corporation, in light of compelling documentary evidence submitted by plaintiff establishing that defendant never was a corporate officer. In any event, the declaratory judgment action commenced against defendant was not brought "by reason of the fact that he was an officer, or for any action allegedly taken by him as an officer. Accordingly, he did not qualify for a discretionary allowance by the court for his reasonable expenses in defending the action.
Concur — Wallach, J. P., Tom, Mazzarelli and Saxe, JJ.