New York’s oppressed shareholder statute has a unique provision that was initially intended to prevent the oppressed shareholder from destroying a viable business. That is because the New York statute otherwise gives the court only two options: send the oppressed shareholder away or force the dissolution of the business.
Other states give court’s more discretion, and a judge also has the ability to force a sale of an interest. New York’s statutory scheme, however, takes a different approach. (See our discussion here of some of the quirks of New York’s oppressed shareholder statute: Business Divorce New York Style.) One of the wrinkles in the statute, however, is that once a litigant invokes the oppressed shareholder provision in Business Corporations Law § 1104-a, it’s very difficult to stop the process.
Peter Mahler’s New York Business Divorce blog reports on an decision by a trial judge in Nassau County’s commercial part who declines to allow the plaintiff to withdraw a claim under BCL 1104-a. In that case, the plaintiff tried to get out of the substantive and procedural limitations that flow from the conclusory assertion of a claim under 1104-a.