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Smerling Enterprises, Inc. v. Goldstein

Appellate Division of the Supreme Court of New York, First Department
Jun 30, 1992
184 A.D.2d 480 (N.Y. App. Div. 1992)

Opinion

June 30, 1992

Appeal from the Supreme Court, New York County (Alfred Toker, J.).


Defendant became the president and chief operating officer of plaintiff Smerling Enterprises, Inc. (SEI) in 1984 pursuant to an employment contract and simultaneously was given 10% of the stock of SEI's parent corporation. In 1987 when defendant complained about the individual plaintiff Smerling's practice of selling corporate assets for cash, he was discharged. This lawsuit ensued and defendant Goldstein asserted counterclaims based on the diversion of assets from the corporation due to the cash sales. However, these allegations, contained in the first and third counterclaims, may only be asserted in a shareholder's derivative action and may not be maintained individually as defendant attempts to do (Abrams v Donati, 108 A.D.2d 704, affd 66 N.Y.2d 951). Nor can the third-party complaint stand against the corporation's accountants, since it was not shown, beyond the amount set forth by the trial court, that defendant relied on the financial statements to his detriment (see, Credit Alliance Corp. v Andersen Co., 65 N.Y.2d 536).

Concur — Milonas, J.P., Ellerin, Kupferman, Ross and Smith, JJ.


Summaries of

Smerling Enterprises, Inc. v. Goldstein

Appellate Division of the Supreme Court of New York, First Department
Jun 30, 1992
184 A.D.2d 480 (N.Y. App. Div. 1992)
Case details for

Smerling Enterprises, Inc. v. Goldstein

Case Details

Full title:SMERLING ENTERPRISES, INC., et al., Respondents, v. ALAN GOLDSTEIN…

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

Date published: Jun 30, 1992

Citations

184 A.D.2d 480 (N.Y. App. Div. 1992)
585 N.Y.S.2d 428

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