Opinion
March 11, 1994
Appeal from the Supreme Court, Monroe County, Stander, J.
Present — Green, J.P., Pine, Fallon, Callahan and Boehm, JJ.
Order and judgment unanimously affirmed with costs to plaintiff. Memorandum: Despite the fact that there were two shareholders in Gateway Structural Products, Inc., a close corporation, there never was more than one director, in violation of Business Corporation Law § 702. The court did not abuse its discretion in this shareholder's derivative action in voiding disproportionate salary increases to the majority shareholder/sole director/president and secretary, a personal loan by the corporation to him, and a corporate loan to a separate corporation. There was proof that the corporation was not authorized to take those actions and that the other shareholder had no knowledge of them and thus could not have consented (see, Matter of Rye Psychiatric Hosp. Ctr. v Schoenholtz, 66 N.Y.2d 333, 338-339; Lehman v. Piontkowski, 93 A.D.2d 809, 814, affd 61 N.Y.2d 703). Likewise, the court did not abuse its discretion in awarding plaintiff counsel fees of $22,500, to be paid from the judgment.