In the Matter of Barton Mark Perlbinder, Muffy Flouret v Stephen Perlbinder et al.
Categories
Attorneys and Parties
Brief Summary
Corporate dissolution and receivership involving liquidation of interwoven business entities holding property, including how a receiver may sell assets during dissolution.
The lower court denied Muffy Flouret's request to require the receiver to use a tax-efficient property division method of dissolution and entered a receivership order permitting dissolution through bulk asset sale liquidation.
The Appellate Division modified the order to require that any sales by the receiver be either confirmed by Supreme Court or approved by all parties; it otherwise affirmed.
Flouret had standing to appeal because she did not receive complete relief. The appellate court held the bulk-sale liquidation provision was not improper sua sponte relief because her petition sought liquidation and distribution of assets, but precedent required receiver sales of property to be subject to judicial confirmation or unanimous party approval.
Background
Flouret sought dissolution of corporations and appointment of a receiver, alleging the entities were financially interwoven and requesting liquidation, a full accounting, and distribution of assets among shareholders. Although the pleadings did not expressly seek conversion of ownership from business entities to tenants in common, Flouret included that request in a proposed order submitted to the motion court. The court did not grant that requested relief and instead issued a receivership order allowing dissolution by bulk asset sale liquidation.
Lower Court Decision
Supreme Court, New York County denied Flouret's request that the receiver be required to implement a tax-efficient property division method of dissolution and entered an order appointing a receiver with authority for bulk asset sale liquidation. The order also did not include Flouret's requested tenants-in-common ownership structure.
Appellate Division Reversal
The Appellate Division held that Flouret was an aggrieved party with standing to appeal because she did not obtain complete relief. It rejected her argument that the motion court had granted improper sua sponte relief, since her verified petition expressly requested liquidation and distribution of corporate assets. However, it modified the order to direct that any receiver sales must be confirmed by Supreme Court or approved by all parties. The court also rejected challenges based on CPLR 2219(a) [provides that an order shall list the papers reviewed in determining a motion], finding that an incomplete recital of papers did not require vacatur where the appellate record contained the necessary materials. It further held that no evidentiary hearing was required because Flouret had not requested one and there was no determinative factual dispute.
Legal Significance
The decision clarifies that a party who prevails in part may still appeal when complete relief was denied. It also confirms that, in a corporate dissolution receivership, a receiver's sale of property should not proceed unchecked; instead, it must be subject to court confirmation or unanimous party approval. The ruling further underscores that technical noncompliance with CPLR 2219(a) does not automatically invalidate an order and that an evidentiary hearing is unnecessary absent a requested hearing and a material disputed issue.
In New York corporate dissolution proceedings, a receiver may liquidate assets when liquidation has been requested, but property sales must be supervised through court confirmation or party consent, and appellate standing exists when a party wins some relief but not all the relief sought.