Opinion
June 24, 1997
Appeal from Supreme Court, New York County (Stuart Cohen, J.).
This action by a cooperative housing corporation against its former directors for misappropriation of corporate funds was properly dismissed on the ground that plaintiff cannot repudiate the releases it gave its former directors in connection with the settlement of the mortgage foreclosure action that plaintiff's present principal had brought against it, having accepted all the benefits given to it under the settlement even after discovery of the alleged fraud that it claims vitiates the releases ( see, Clearview Concrete Prods. Corp. v. S. Charles Gherardi, Inc., 88 A.D.2d 461, 466), and even now continuing to reaffirm the settlement. Having prevailed in the action, defendants are entitled to indemnification for their reasonable expenses under plaintiffs by-laws (Business Corporation Law § 723 [a]).
Concur — Sullivan, J.P., Milonas, Williams and Tom, JJ.