Matter of Pappas v Corfian Enters. Ltd.

[*1] Matter of Pappas v Corfian Enters. Ltd. 2009 NY Slip Op 50109(U) [22 Misc 3d 1113(A)] Decided on January 23, 2009 Supreme Court, Kings County Battaglia, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on January 23, 2009
Supreme Court, Kings County

In the Matter of the Petition of Theano Pappas, as Executrix of the Estate of Eleftherios Pappas, Holder of One-third of the Shares of Corfian Enterprises, Ltd. and Epiros Realty, Ltd., for the Judicial Dissolution of Corfian Enterprises, Ltd. and Epiros Realty, Ltd., Petitioners,

against

Corfian Enterprises, Ltd., Epiros Realty, Ltd., Paul Fotinos and Theodoros Kalogiannis, Respondents.



7805/04



Petitioners were represented by George G. Coffinas, Esq. of Coffinas & Coffinas LLP. Respondents Corfian Enterprises, Ltd., Epiros Realty, Ltd., and Paul Fotinos were represented by Norman A. Senior, Esq. and Elana L. Danzer, Esq. of Greenfield Stein & Senior LLP. Respondent Theodoros Kalogiannis was represented by Chris Georgoulis, Esq. and George Sitaras, Esq. of Georgoulis & Associates PLLC.

Jack M. Battaglia, J.

With her Verified Petition dated February 26, 2004, Theano Pappas, as executrix of the Estate of Eleftherios Pappas, her deceased husband, seeks judicial dissolution pursuant to Business Corporation Law § 1104-a of two corporations, Corfian Enterprises, Ltd. and Epiros Realty, Ltd. In addition to the two corporations, two individuals are named as respondents, Paul Fotinos and Theodoros Kalogiannis, alleged to be controlling shareholders of the two corporations.

Ms. Pappas alleges that Mr. Pappas's estate, Mr. Fotinos, and Mr. Kalogiannis each hold one-third of the shares of each of the respondent corporations. In his Verified Answer and Cross-Claims dated March 25, 2005, Mr. Kalogiannis also alleges that he, Mr. Fotinos, and Mr. Pappas's estate each hold one-third of the shares of the two corporations, and also seeks judicial dissolution pursuant to BCL § 1104-a. In this opinion, Ms. Pappas and Mr. Kalogiannis will at times be referred to collectively as "Petitioners." When "Respondents" is used collectively, it will not include Mr. Kalogiannis. [*2]

Mr. Fotinos denies that either Mr. Pappas's estate or Mr. Kalogiannis hold shares in either Corfian Enterprises or Epiros Realty, contending that he holds all of the shares of both corporations. Respondents moved for summary dismissal of Ms. Pappas's petition and Mr. Kalogiannis's cross-claim on the ground, among others, that neither Ms. Pappas, as the representative of Mr. Pappas's estate, nor Mr. Kalogiannis has standing to seek judicial dissolution of either corporation. "The threshold requirement for judicial dissolution is that the shareholders seeking dissolution hold at least 20% of the company's stock." (Shea v Hambros PLC, 244 AD2d 39, 52-53 [1st Dept 1998].)

In a memorandum decision dated September 6, 2007, the Hon. Herbert Kramer denied Respondents' motion for summary dismissal, holding, among other things, that Respondents failed to make a prima facie showing that Mr. Fotinos is the holder of all of the shares of Corfian Enterprises and Epiros Realty. Justice Kramer's ruling was affirmed by the Second Department in an opinion holding that Corfian, Epiros and Fotinos "failed to tender sufficient evidence to eliminate any material issues of fact from the case as to whether Pappas and Kalogiannis each possess the requisite 20% ownership in Corfian and Epiros necessary to seek judicial dissolution of the two companies." (Matter of Corfian Enterprises, Ltd., 52 AD3d 828, 829 [2d Dept 2008].)

At a hearing limited to the question of standing, the Court heard 14 witnesses over eight days of testimony, and admitted 48 documents into evidence. There is no dispute that Petitioners have the burden of establishing with a preponderance of the credible evidence that they hold the requisite shareholder interest to constitute standing. (See Blank v Blank, 256 AD2d 688, 694 [3d Dept 1998]; Matter of Kourianos [H.M.G., Inc.], 175 AD2d 129, 129 [2d Dept 1991].)

The parties have stipulated, however, that if the evidence supports the shareholder interest of either Ms. Pappas or Mr. Kalogiannis, it shall be deemed to establish the shareholder interest of the other; that, if so established, Petitioners' respective shareholder interests are one-third each; and that Petitioners' status as shareholders did not change over time. The parties have also stipulated that, despite the rather total lack of attention to corporate formalities, both Corfian Enterprises, Ltd, and Epiros Realty, Ltd. were validly incorporated and organized, and continue to exist in good standing. (See Concrete Construction Systems, Inc. v Jensen, 65 AD2d 918, 918-19 [4th Dept 1978]; see also Living Window ICC, Inc. v James S. Ward, Inc., 1981 US Dist LEXIS 11171, * 13- * 14 [SDNY].) The parties also agree that Petitioners may be determined to be shareholders of either Corfian or Epiros or both, and a finding that they are shareholders of one does not in itself require a finding that they are shareholders of the other.

Petitioners' burden is tempered by the principal that, "[w]hen the facts required to resolve an issue are within the exclusive knowledge and control of a respondent, it is generally inappropriate to place the burden of proof with respect to that issue on a petitioner." (See Cruz v Westchester County Health Care Corp., 9 AD3d 460, 461 [2d Dept 2004]; see also Reback v Reback, 41 AD3d 814, 816 [2d Dept 2007].) Access to evidence may be considered in allocating the burden of production or coming forward with evidence, with recognition that "[s]hifting the burden of explanation or of going on with the case does not shift the burden of proof." (See [*3]Plumb v Richmond Light & R. Co., 233 NY 285, 288 [1922].) Access to evidence may, more generally, be considered in assessing evidence for probative value and weighing it against other evidence.

Neither Corfian Enterprises, Ltd. nor Epiros Realty, Ltd. has issued share certificates to anyone. But "[t]he mere fact that the corporation did not issue any stock certificates does not preclude a finding that [a person] has the rights of a shareholder." (French v French, 288 AD2d 256, 256 [2d Dept 2001]; see also Matter of Estate of Purnell v LH Radiologists, 90 NY2d 524, 532 [1997]; U.S. Radiator Co. v State of New York, 208 NY 144, 149 [1913]; Matter of Tavlin v Munsey Candlelight Corp., 69 AD2d 865, 866 [2d Dept 1979].) The failure to even hold an organizational meeting does not change the result. (See La Conti v Urban, 309 AD2d 735, 736-37 [2d Dept 2003].)

In the absence of a share certificate, however, a court must determine from other available evidence whether a putative shareholder in fact and law enjoys that status, and, if so, whether shares held amount to the 20% threshold required for standing to seek judicial dissolution pursuant to BCL § 1104-a. The courts of this State do not appear to have articulated a framework for considering other available evidence, or to have described the sources of that evidence or the bases for admissibility.

Without purporting to provide a comprehensive statement of that framework or description of admissible evidence, this Court proceeds from the nature of the status that is being addressed. "The relationship between a corporation and its stockholders is contractual . . . ; to constitute one a stockholder a subscription or contract whereby the right to hold stock or upon some condition to demand stock and to exercise the rights of a stockholder is required." (Matter of Stewart Becker, Ltd. v Horowitz, 94 Misc 2d 766, 771 [Sup Ct, Suffolk County 1978].) A stock certificate "expresses the contract between the shareholder and the corporation and his co-shareholders." (U.S. Radiator Co. v State of New York, 208 NY at 149.) "But it is the payment, or the obligation to pay for shares of stock, accepted by the corporation, that creates both the shares and their ownership." (Id. at 149-50.)

Consideration for shares "imports a contribution to the capital stock made by the shareholder and accepted by the corporation." (See id. at 149.) "A share of corporate stock is the right which the shareholder has to participate according to the number of shares in the surplus profits of the corporation on a division, and in the assets or capital stock remaining after payment of its debts on its dissolution or the termination of its active existence and operation." (Id.)

By statute, "[c]onsideration for the issue of shares shall consist of money or other property, tangible or intangible; labor or services actually received by or performed for the corporation or for its benefit or its formation or reorganization; a binding obligation to pay the purchase price or the subscription price in cash or other property; a binding obligation to perform services having an agreed value; or a combination thereof." (Business Corporation Law § 504 [a].) Experience and professional relationships can constitute consideration (see Matter of [*4]Heisler v Gingras, 90 NY2d 682, 687 [1997]), as well as other "financial contributions to the incipient enterprise" (see Matter of Estate of Purnell v LH Radiologists, 90 NY2d at 532; Hunt v Hunt, 222 AD2d 759, 761 [3d Dept 1995]; Matter of Dissolution of C & M Plastics, Inc., 194 AD2d 1020, 1023 [3d Dept 1993].) The shares may even be paid for from the profits of the corporation. (See Matter of Dissolution of Three House Plants and Flowers, Ltd., 135 AD2d 396, 396 [1st Dept 1987.) Services may provide consideration for a stock interest, and "receipt of a salary as a corporate employee [does] not eradicate the consideration for [a] stock interest." (See Matter of Capizola v Vantage International, Ltd., 2 AD3d 843, 844 [2d Dept 2003].)

In the first instance, therefore, a court should look for evidence that consideration has been paid for a stock interest (see Matter of Heisler v Gingras, 90 NY2d at 687; Matter of Capizola v Vantage International, Ltd., 2 AD3d at 844-45), and for evidence that any proceeds of the enterprise have been distributed to the putative shareholder (see Matter of Seward, 222 AD2d 500, 501 [2d Dept 1996].) In an ideal world, that evidence would be easily and clearly extracted from the corporation's books and records. A corporation's books and records of account, which are required by statute to be kept "correct and complete" (see BCL § 624 [a]), are "prima facie evidence of the facts stated therein in favor of the plaintiff in any action or special proceeding against such corporation or any of its officers, directors or stockholders" (see BCL § 624 [g].) The books and records are not, however, conclusive, and evidence may show that someone other than the record owner of the stock is the beneficial owner. (See Matter of Seward, 222 AD2d at 500-01.)

In the real world, particularly that in which close corporations operate, clear evidence of share ownership is often not found in the corporate books and records, for any number of reasons. Other evidence must be found, and the lodestar for admissibility and probative value must be the contractual foundation for shareholder status. A court may consider the intent of the parties, particularly evidence of an agreement to form a corporation. (See Matter of Estate of Purnell v LH Radiologists, 90 NY2d at 530; Blank v Blank, 256 AD2d at 689.) That evidence is admissible as illuminating the state of mind of one or more of the parties. (See People v Ricco, 56 NY2d 320, 320 [1982]; Matter of Bergstein v Board of Educ., 34 NY2d 318, 324 [1974].) Moreover, "[u]nder the state of mind' hearsay exception, when a particular act of [a] declarant is at issue, the declarant's statement of a future intent to perform that act is admissible as proof of the declarant's intent on that issue and as inferential proof that the declarant carried out his intent'." (People v D'Acton, 289 AD2d 711, 712-13 [3d Dept 2001] [quoting People v Chambers, 125 AD2d 88, 91 (1st Dept 1987)].) "As a further extension of this species of the state of mind' exception, courts have admitted statements of a declarant's future intent to perform an act with another person as circumstantial proof that the act did occur and, by necessary implication, that the other person participated in the act'." (People v D'Acton , 289 AD2d at 713 [quoting People v Chambers, 125 AD2d at 91].)

A court, in addition, may consider the "conduct among the parties reflecting and in furtherance of status . . . as . . . shareholders" (see Matter of Estate of Purnell v LH Radiologists, 90 NY2d at 532; Vick v Albert, 47 AD3d 482, 482 [1st Dept 2008]); the "managerial [*5]responsibilities" borne by the putative shareholder (see Matter of Seward, 222 AD2d at 501); and how non-parties understand the relationship based upon their observation of the conduct among the parties (see Matter of Heisler v Gingras, 90 NY2d at 687; Hunt v Hunt, 222 AD2d at 760.) Of course, "managerial responsibilities" or the exercise of executive functions may be as consistent with status as an officer, or even an employee, as it is an indication of shareholder status, and the observations of third parties may be selective or limited.

Documentary evidence may be particularly probative when the documents were created under circumstances in which there was no incentive to fabricate. Among the types of documents that courts have considered, and that have been proffered in this case, are corporate and personal tax returns, bank loan documents, and financial statements. (See Matter of Capizola v Vantage International, Ltd., 2 AD3d at 845; Blank v Blank, 256 AD2d at 694; Hunt v Hunt, 222 AD2d at 761; Rodriguez v Estevez, 19 Misc 3d 1116 [A], 2008 NY Slip Op 50732 [U], * 12- * 16 [Sup Ct New York County].) Documents of this type, however, even when filed with government agencies, are "not in and of [themselves] determinative." (See Matter of Heisler v Gingras, 90 NY2d at 688; see also Roth v Speilman, 25 AD3d 383, 383-84 [1st Dept 2006].) "Estoppel, and its related theories (e.g., waiver, acquiescence and course of conduct) should be generally inapplicable as bases to determine controversies of this kind." (Matter of Heisler v Gingras, 90 NY2d at 686-87.)

Where, as here, one of the principals is deceased, "the admissions or declarations of administrators and executors may be evidence - - where they are made while engaged in the performance of a duty pertaining to the estate in a representative capacity, in which the declaration is pertinent and accompanies the act so as to constitute a part of the res gestoe." (Davis v Gallagher, 124 NY 487, 492 [1891].) Estate tax returns and certifications can, therefore, constitute admissions of the deceased. (See Strang v Prudential Ins. Co., 263 NY 71, 76 [1933]; Acme Am. Repairs, Inc. v Uretsky, 39 AD3d 675, 676-77 [2d Dept 2007]; Commercial Trading Co., Inc. v Tucker, 80 AD2d 779, 780 [1st Dept 1981]; Breese v Graves, 67 AD 322, 327-28 [4th Dept 1901].) The probative value of the statement is to be assessed in the light of the personal knowledge of the representative (see id. at 328-29), and, in any event, the statement is not conclusive, but constitutes "some evidence" (see Davis v Maloney, 49 AD3d 385, 386 [1st Dept 2008].)

Finally, as to evidentiary matters generally, and particularly pertinent here, is the effect of the absence of documentary support for oral testimony. "[W]here an adversary withholds evidence in his possession and control that would be likely to support his version of the case, the strongest inference may be drawn against him which the opposing evidence in the record admits." (Noce v Kaufman, 2 NY2d 347, 353 [1957]; see also Bleecker v Johnston, 69 NY 309, 312 [1877].) The legitimacy of the inference depends upon prima facie showings "that the document in question actually exists, that it is under the opponent's control, and that there is no reasonable explanation for failing to produce it." (See Jean-Pierre v Touro College, 40 AD3d 819, 820 [2d Dept 2007]; see also Scaglione v Victory Mem. Hosp., 205 AD2d 520, 520-21 [2d Dept 1994].) As will appear, there is a pervasive lack of documentary evidence here, not the [*6]least important being the corporate books and records of the corporate respondents.

Corfian Enterprises Ltd./577 Baltic

Elefterios Pappas, Theodoros Kalogiannis, and Paul Fotinos first met in the mid-1970s through their association with a ship repair company, aptly named United Ship Repair, Inc. Messrs. Pappas and Kalogiannis were shareholders in United Ship Repair; Mr. Pappas owned 10%, and Mr. Kalogiannis owned 30%. The balance of the shares were owned by a Nikitis Tampakis at 30%, and a Peter Petris at 30%. Mr. Fotinos was an employee of United Ship Repair.

On December 8, 1982, Messrs. Pappas, Kalogiannis, and Petris sold their respective shares to Mr. Tampakis. Mr. Kalogiannis and Mr. Petris each received a total of $171,000 for their shares; Mr. Pappas received a total of $51,000. Mr. Kalogiannis received $121,000 in cash, paid in part over time, and spare parts with a value of $50,000. Mr. Pappas received cash, also paid in part over time. As a result of these payments, at the end of December 1982, Mr. Kalogiannis had cash in hand of $64,000; Mr. Pappas had cash in hand of $22,000.

Meanwhile, Mr. Fotinos had joined a Steve Manavelos in a business incorporated in August 1979 as Pacific Technical Service Corp. As it happened, by the end of 1982, Mr. Fotinos and Mr. Manavelos had gone their separate ways, and Mr. Fotinos was doing business, apparently on his own, as Nafsis Metal Works and Pacific Marine, apparently corporations formed by Mr. Fotinos before the end of 1982.

At the end of 1982, Messrs. Pappas, Kalogiannis, and Fotinos agreed to purchase real property located at 577-79 Baltic Street, Brooklyn ("577 Baltic"), which they did on January 12, 1983, taking title as tenants in common, one-third each. The property was improved with a warehouse-type building of approximately 6,000 square feet, with an interior loft/mezzanine of approximately 2,500 square feet. The purchase price was approximately $90,000. Each of the owners contributed $12,000 in cash; the balance of the purchase price was covered by a purchase money mortgage ($33,400) and outstanding in rem taxes ($21,600).

There is no dispute about the ownership of 577 Baltic, but there is dispute about the purpose of the purchase. Petitioners contend, supported only by the testimony of Ms. Pappas and Mr. Kalogiannis, that the property was purchased as the location of the business of Petitioners and respondent Fotinos, operated as co-owners under a number of corporate or business names.

Mr. Fotinos contends, supported only by his testimony, that Mr. Pappas and Mr. Kalogiannis purchased their interests in the property as investments, and in the short term as a place where Mr. Kalogiannis could store and sell the $50,000 in the spare parts he received on sale of his interest in United Ship Repair.

Petitioners contend, again supported only by the testimony of Ms. Pappas and Mr. Kalogiannis, that, contemporaneous with the purchase of 577 Baltic, Mr. Pappas, Mr. [*7]Kalogiannis, and Mr. Fotinos each contributed $36,000 to the capital of the business to be conducted from 577 Baltic. According to Mr. Kalogiannis, his contribution was in the form of cash payments made to purchase the machinery used in the business. According to Ms. Pappas, her husband's contribution was paid over time from his share of the profits from the business; one-half of the profits, as they were determined, was paid to him, and the other half contributed as part of capital. Mr. Kalogiannis also testified that the spare parts he received from United Ship repair were repaired and sold from 577, with the "cost" of the parts returned to him, and the profit on the sale staying in the business.

It is the position of Petitioners that, as a result of an agreement among Messrs. Pappas, Kalogiannis, and Fotinos, and their respective contributions to the business, each became an owner of one-third of the shares of the corporations formed to conduct business from 577 Baltic, including Corfian Enterprises, Ltd. Respondent Fotinos denies any such agreement, and, although he did not specifically testify as to the alleged contributions to capital or the proceeds from the sale of Mr. Kalogiannis's spare parts, he denies that either Mr. Pappas or Mr. Kalogiannis was ever a shareholder of any of the corporations he formed to conduct business from 577 Baltic. According to Mr. Fotinos, Mr. Pappas and Mr. Kalogiannis were no more than salaried employees, paid on an hourly basis, and receiving "bonuses" "from time to time."

Petitioners are supported by the testimony of two non-party witnesses. Deborah Henry worked for Mr. Fotinos before he conducted business from 577 Baltic; and for approximately six years, from 1982 through 1988 (except for six months in 1986), she was the secretary, bookkeeper, and office manager for the business at 577 Baltic. In her words, she was the "one-person office." Ms. Henry testified that at the end of 1982, beginning of 1983, Mr. Fotinos told her he was entering into a "partnership" with Messrs. Pappas and Kalogiannis - - a comment he explains as a reference only to the joint ownership of the property at 577 Baltic. (Specifically, Mr. Pappas and Mr. Kalogiannis "were, more or less, going into business with Mr. Fotinos. They were forming a company, partnership, whatever you want to call it.") Jim Tampakis, the son of one of the shareholders in United Ship Repair testified that Mr. Pappas said he was "going to be partners" with Messrs. Kalogiannis and Fotinos.

Over two decades, until Mr. Pappas's death in December 2000 and Mr. Kalogiannis's termination or retirement, depending upon whom one believes, at the end of 2003, they worked with Mr. Fotinos at or from 577 Baltic in a business that included marine and building maintenance and repair, and structural steel work. There in no dispute that Mr. Pappas was in charge of the machine shop on the first floor at 577 Baltic; that Mr. Kalogiannis supervised field work on ships or at buildings; and that Mr. Fotinos essentially managed the business. According to Ms. Henry, however, "the three gentlemen ran [the business] together," and business decisions were made by "any one of them."

That business, with its various components, was conducted under a number of corporate or business names, including United Steam & Diesel, Inc.; Steam & Diesel International, Inc.; SDI Corporation; Structural Development, Inc.; PF Consulting; Pacific Marine; and Nafsis Metal [*8]Works. Corfian Enterprises, Ltd. was incorporated on August 3, 1993, and appears to have been considered the successor to the business of one or more of these companies, particularly United Steam & Diesel, Inc., which was incorporated on December 14, 1982, contemporaneous with the purchase of 577 Baltic, and dissolved on December 23, 1992, shortly before Corfian's incorporation. Corfian appears on business-related documents as Corfian Enterprises, Inc. and Corfian Enterprises Corp., but the parties appear agreed that there was and is only one Corfian, i.e., Corfian Enterprises, Ltd. (It should also be noted that Epiros Realty, Inc. and Epiros Realty, Ltd. also operate or operated from 577 Baltic, as did another real estate company named Excellent Management.)

There is sufficient evidence of commingling of finances and personnel for the Court to conclude, at least for purposes of the current inquiry, that these "separate corporations were in reality treated as a single entity." (See Matter of Dissolution of Wiedy's Furniture Clearance Center, Co., Inc., 108 AD2d 81, 82-83 [3d Dept 1985].) For example, Ms. Henry produced copies of her weekly pay stubs from 1985-1988, showing that the "one-person office" was paid from time to time by United Steam & Diesel, Inc., SDI Corporation, or Nafsis Metal Works Inc. (If only the parties had been as diligent in their record-keeping as Ms. Henry.) As characterized by a former employee, William Bauccio, you would "turn your hat around," and it was another company. Mr. Kalogiannis testified that he had signature authority on the bank accounts for the various 577 Baltic corporations, and even Mr. Fotinos acknowledges that Mr. Pappas had signature authority for some of the corporations.

Both Ms. Pappas and Mr. Kalogiannis testified that Messrs. Pappas, Kalogiannis, and Fotinos each received equal payments from the business operated from 577 Baltic. According to Mr. Kalogiannis, the three shareholders would meet monthly to review the finances of the business and decide how much, if anything, would be paid to the shareholders as a distribution of profits. Mr. Fotinos does not dispute the monthly meetings, which in any event were confirmed by Ms. Henry, but testified that they were for the purpose of his employees' reporting to him. Mr. Kalogiannis testified that he kept his own record of these meetings and amounts distributed, but that it had been stolen from his desk at 577 Baltic. The personal tax returns of Messrs. Pappas, Kalogiannis, and Fotinos, and the corporate tax returns of Corfian Enterprises, Ltd., are discussed below.

Among the more interesting testimony is that of Ms. Henry, who regularly prepared the payroll checks for the employees of the 577 Baltic business. Ms. Henry testified that she never wrote a payroll check to either Mr. Pappas or Mr. Kalogiannis or Mr. Fotinos. If, as Mr. Fotinos contends, Mr. Pappas and Mr. Kalogiannis were only employees, Ms. Henry's testimony, uncontradicted, is strong evidence that, at the least, they were not treated like the other employees in the significant aspect of payment for services.

Also of particular interest is the relationship between the corporations doing business at 577 Baltic and the owners of the property. Mr. Fotinos testified that, beginning in 1983, there were written leases between one of his corporations at 577 Baltic and the three owners of the [*9]property. The only lease in evidence, however, is one dated April 1, 1994, providing for a 15 year term with an option to renew for an additional five years. There is no fixed rent; rather, Corfian agrees to pay as rent "an amount of money necessary to pay all expenses of the landlord to retain ownership of 577 Baltic Street, Brooklyn, NY and to maintain and repair the building, including mortgage payments and taxes." The lease also provides, "Tenant to pay all expenses resulting from operation of the tenants (sic) business." For the present, the Court will note only that the arrangement is not typical.

On October 29, 1986, Messrs. Pappas, Kalogiannis, and Fotinos, as the owners of 577 Baltic, obtained a loan of $260,000 from Atlantic Bank of New York, and granted the Bank a mortgage on the premises. The proceeds of the loan were distributed to the three owners, each receiving approximately $87,000. The loan was refinanced by Atlantic Bank on January 29, 1997, resulting in a rate modification but no proceeds for distribution. Documents related to the 1997 transaction are discussed below.

Epiros Realty, Ltd./583 Baltic

Epiros Realty, Ltd. was incorporated on June 13, 1985, and on October 11, 1985 purchased real property located at 583-89 Baltic Street, Brooklyn ("583 Baltic.") The property is improved by a building of approximately 15,000 square feet, divided into three units of approximately 5,000 square feet each that have been rented to non-parties. On September 13, 1996, 583 Baltic was transferred to Epiros Realty, Ltd., incorporated on June 21, 1996. Although the details are unclear, the incorporation of Epiros Realty, Ltd. and transfer of 583 Baltic were prompted by problems created by the failure of Epiros Realty, Inc. to pay franchise taxes.

The purchase price for 583 Baltic was approximately $287,000, of which $86,000-$87,000 represented unpaid taxes. Because of the condition of the building, the purchase could not be financed, and required a cash payment of approximately $200,000. The source or sources of that cash is a matter of significant dispute. Petitioners contend, without documentary support, that Messrs. Pappas, Kalogiannis, and Fotinos each contributed approximately $67,000. Mr. Fotinos contends, also without documentary support, that the entire cash payment came from him.

There is no dispute that in September 1985, shortly before the purchase of 583 Baltic, Messrs. Pappas, Kalogiannis, and Fotinos each obtained a $100,000 home equity line of credit from Atlantic Bank. Mr. Fotinos appears to acknowledge that his line of credit provided some of the funds for the purchase of 583 Baltic, but he contends that the Pappas and Kalogiannis lines of credit were used for other purposes. Specifically, he maintains that Mr. Kalogiannis used his funds for other real estate investments, and that Mr. Pappas used his to repay loans to Mr. Fotinos. There is no documentary evidence of the loans or the repayment.

The closing statement for the purchase of 583 Baltic was not introduced into evidence by any of the parties, although it would have been expected more from Mr. Fotinos. Although more [*10]than 20 years have passed since the purchase, the property is still owned by Epiros Realty, and appears to be its primary, if not sole, asset, and Mr. Fotinos acknowledged that he did receive a copy of the closing statement. Also, Mr. Fotinos was able to produce the closing statement for the purchase of 577 Baltic almost three years earlier.

The parties agree that Messrs. Pappas and Kalogiannis worked on the renovations to the building at 583 Baltic. According to Mr. Kalogiannis, neither he nor Mr. Pappas received any payment for the work they did on 583 "because it was ours." According to Mr. Fotinos, however, Mr. Pappas and Mr. Kalogiannis were paid a salary to do the work. There is no documentary evidence to resolve the dispute, and, again, it would be expected more from Mr. Fotinos.

On August 3, 1987, a loan of $500,000 was obtained from Atlantic Bank, with a mortgage granted on 583 Baltic. Mr. Kalogiannis testified that the loan proceeds of approximately $167,000 each (i.e., Messrs. Pappas, Kalogiannis, and Fotinos) were used to repay the $67,000 borrowed by each against the line of credit for the original purchase, and the balance of $100,000 was distributed to each. Mr. Fotinos did not in terms contradict Mr. Kalogiannis's account, although his denial must be fairly implied from his testimony as a whole. Perhaps the closing statement for the 1987 loan would have resolved the question, but it was not introduced into evidence by any of the parties. Again, its production would have been expected more from Mr. Fotinos, who acknowledged that he did receive a copy, and who produced a copy of his attorney's invoice for the transaction.

There was refinancing of 583 Baltic on September 13, 1996 and on February 26, 2003. There was no testimony or other evidence introduced as to the disposition of the proceeds, if there were any; Mr. Fotinos testified generally that at times the loans related to 577 Baltic and 583 Baltic were rewritten only to reduce the interest rate. Documents related to the 1996 transaction are discussed below.

For the present, it should be noted, however, that with respect to all of the financing transactions as to 583 Baltic, only Mr. Fotinos executed a personal guaranty. It seems quite clear, despite Petitioners' arguments to the contrary, that Atlantic Bank, the lender on all of the transactions, understood that Paul Fotinos was the sole shareholder of Epiros Realty, Ltd. There is no indication, however, that this understanding was based upon anything other than representations made by Mr. Fotinos.

Documentary Evidence

Petitioners can point to little in the way of documentary support for their assertion that they are shareholders in Corfian Enterprises, Ltd. and Epiros Realty, Ltd. Insurance documents that refer to Messrs. Kalogiannis and Fotinos "doing business as" Epiros Realty have virtually no significance in the context of a policy providing coverage for both 577 Baltic and 583 Baltic. The same must be said about Atlantic Bank's use of a loan number related to 583 Baltic in documents related to 577 Baltic or the individual co-owners; in 1996, for example, refinancing [*11]transactions were pending as to both properties. Particularly given the manner in which business was conducted at 577 Baltic, which included the activities of Epiros Realty, there is no reason to believe that these documents reflect anything but mistakes or confusion.

Petitioners point to checks written on the bank accounts of Structural Development Inc. and Corfian Enterprises "Corp.", used to pay fees in connection with the 1997 refinancing of 577 Baltic, as suggesting common ownership of the corporations and the real property. But, under the terms of the Corfian lease, Corfian was responsible for mortgage payments, and might well pay to obtain a lower interest rate.

Similarly, Petitioners point to a check written on the account of Steam & Diesel International, Inc., used to pay fees in connection with the 1987 financing of 583 Baltic, and a check written on the account of Corfian Enterprises "Corp," used to pay a fee in connection with the 1996 refinancing of 583 Baltic, as suggesting common ownership of those corporations and Epiros Realty, Ltd., the owner of 583. But, even ignoring the commingling of funds among the various corporations conducting business at 577 Baltic, evidence of common ownership only assists Petitioners if they are deemed to be shareholders of either Corfian or Epiros.

Various financial statements introduced into evidence by Respondents are, at the least, ambiguous in their implications. In a financial statement of Mr. Fotinos dated May 4, 1987, he described himself as "managing director" of United Steam & Diesel, rather than its owner or sole shareholder. The financial statements submitted by the three owners of 577 Baltic in connection with the 1997 refinancing reveal that none of the three claims any interest in 583 Baltic, and neither Mr. Pappas nor Mr. Kalogiannis accounts for his interest in 577.

Respondents also rely on the personal tax returns of Messrs. Pappas, Kalogiannis, and Fotinos, and the corporate tax returns of Corfian and Epiros. To the extent that there are returns for all three individuals, they cover the years 1992 through 1995 and the years 1998 and 1999. Additional returns are available for Mr. Pappas (1997), for Mr. Kalogiannis (1996, 2000-2004), and for Mr. Fotinos (1996, 2000, 2002-2004). The individuals' tax returns are not all complete; schedules are missing where income or loss is reported from "[r]ental real estate, royalties, partnerships, S corporations, trusts, etc."; and W-2 statements are attached for some years but not others.

The corporate tax returns of Corfian cover the years 1997 through 2003; the corporate returns of Epiros cover the years 1996 through 2003, except for 2000. Comparison of the individuals' tax returns and the corporate tax returns is undermined by the difference in reporting periods, in that the corporations report on a fiscal-year basis.

Respondents point out that, for the six years that returns are available for all three individuals, the amounts reported for salary or wages differ every year for Messrs. Pappas and Kalogiannis on the one hand, and Mr. Fotinos on the other. Respondents are correct that, if these returns accurately reflect payments made to the three individuals from the business conducted at [*12]577 Baltic, then the individuals were not, in fact, being compensated equally. Also interesting, however, is that, for three of the six years, Mr. Pappas and Mr. Kalogiannis reported the same total amount as salary or wages, and for a fourth year, they reported the same amount of salary or wages from Corfian. Since Messrs. Pappas and Kalogiannis were receiving their information about the financial affairs of the business from Mr. Fotinos - - never asking for confirmation from corporate books and records, as Respondents point out many times - - they may have simply not been aware that payment was not being made as agreed.

None of the individuals' tax returns report any dividends from either Corfian Enterprises, Ltd. or Epiros Realty, Ltd. "The term dividend' signifies a distribution of profits or earnings to the shareholders." (Matter of City Bank Farmers Trust Co., 4 NY2d 646, 653 [1958].) Mr. Fotinos reported all income received from Corfian as salary or wages, and Epiros does not appear in any of his returns. The individuals' returns, therefore, do not reveal any of the three to be a shareholder of either Corfian or Epiros.

Nor do the individuals' returns reveal their joint and equal ownership of 577 Baltic. None of the returns of either Mr. Pappas or Mr. Kalogiannis contains any reference to 577 Baltic. Only two of the nine Fotinos returns reflect his ownership interest in 577 Baltic, i.e., those for 1998 and 2000. In 1998, Mr. Fotinos reported rental income of $9,317 from 577 Baltic; in 2000, he reported rental income of $6,579 from the property. There was no explanation for the disparate treatment of 577 Baltic on the returns of the three owners, or the disparate treatment on Mr. Fotinos's own returns. Messrs. Pappas and Kalogiannis would have received their information about 577 Baltic, and any required tax forms, from Mr. Fotinos.

The corporate tax returns of Corfian and Epiros show Mr. Fotinos as sole shareholder of both corporations. The Epiros returns show no payment to him as such; the Corfian returns show payments to him as shareholder in fiscal years 1999, 2000, 2001 and 2003, which he apparently reported as salary or wages on his individual returns. For example, Corfian's return for 2002 reports payment of $31,500 to Mr. Fotinos; that amount appears on the W-2 attached to his 2002 return. The accountant who prepared the corporate returns, Prabir K. Roy, testified that he identified Mr. Fotinos as the owner of the two corporations because he was told by Mr. Fotinos that he was the owner. The corporate returns, therefore, provide some evidence that Mr. Fotinos believed he was the sole owner, albeit approximately 15 years after the commencement of business at 577 Baltic and the purchase of 583 Baltic.

Respondents rely most heavily on documents related to the estate of Mr. Pappas, namely, an Asset Questionnaire prepared by an attorney based on information from Mr. Pappas, and a Petition for Probate and Estate Tax Certification signed by Mr. Pappas's executrix. The Asset Questionnaire was prepared in August 2000, approximately four months before his death, and was used by his attorney to prepare his will. The page in the Questionnaire headed "Stocks" and the page headed "Interest in Corporation, Partnership and Limited Partnership" were both empty of an entry. The attorney testified that Mr. Pappas mentioned no "businesses or properties that he had an interest in." [*13]

The attorney also testified, however:

"[T]here came a time when I started the information for the assets questionnaire and . . . I mentioned something about the fact that I understood that he was an employee of Mr. Fotinos."

"He stopped me immediately and said no, no not employee. Business partner. Business associates. Not employee."

The attorney was never asked, and did not explain, the apparent inconsistency between Mr. Pappas's statement, which clearly indicates his understanding of his status as an owner or principal in Mr. Fotinos's business rather than an employee, and the absence of information about stock or business interests in the Asset Questionnaire. The attorney testified to no further questioning of Mr. Pappas about his status or other investigation, although she knew of his one-third co-ownership of 577 Baltic. The Asset Questionnaire is, at best, ambiguous.

After Mr. Pappas's death, the same attorney prepared a Petition for Probate dated August 23, 2001 and Estate Tax Certification dated May 1, 2002 that were signed by Ms. Pappas as executrix. The Petition shows the value of "Personal Property" as "O," and the Tax Certification shows the value of "Stocks and bonds" as "O." The value of any interest held by Mr. Pappas in a closely-held corporation should have been reflected on these documents. And, assuming that a statement of no value is the equivalent of a statement of non-existence, the documents provide evidence as to Ms. Pappas's understanding of her husband's business interests, which provides the foundation of much of the material testimony she gave at the hearing. The probative value is undermined, however, by the attorney's use of the ambiguous Asset Questionnaire in preparing the Petition and Tax Certification for Ms. Pappas's signature.

Of greater significance, however, is the treatment of real property on the Asset Questionnaire and estate documents. Neither the Questionnaire nor either of the estate documents mention 583 Baltic. Although Mr. Pappas's interest in that property, unlike his interest in 577 Baltic, was purportedly held in the medium of share ownership in Epiros Realty, it seems likely that the parties thought of ownership more in terms of the real property rather than the corporation. Indeed, Mr. Kalogiannis testified that title to 583 Baltic was taken by the corporation at the suggestion of Mr. Fotinos to avoid personal liability in connection with its ownership.

Mr. Pappas, of course, is not available to explain his apparent omission of an interest in 583 Baltic among his interests in real property. But Ms. Pappas testified at the hearing, offering full knowledge of her husband's business interests, and she was not asked about, and did not explain, the omission of an interest in 583 Baltic in the valuation of the estate.

In the absence of any highly probative documentary evidence in support of their position, Petitioners rely, with some justification, upon Respondents' failure to produce highly probative documentary evidence to the contrary. Petitioners focus primarily on the absence of [*14]documentary evidence with respect to 583 Baltic, namely, a copy of the check used by Mr. Fotinos to purchase 583 Baltic for Epiros Realty in 1985, the closing statement for that purchase, and the closing statement for the 1987 refinancing of 583. Mr. Fotinos acknowledged receipt of the closing statements, and possession in his files or his attorney's, but no adequate explanation was offered for the failure to produce them.

Petitioners identify no particular document, in existence and in Mr. Fotinos's control, that would provide evidence of Mr. Fotinos's sole ownership of Corfian Enterprises, Ltd. and Epiros Realty, Ltd. But Mr. Fotinos acknowledged that the corporate books and records for these corporations, and "most" of the others that did business from 577 Baltic, are in his possession. Despite his assertion that the corporate books and records would not show ownership, the "correct and complete" books and records of account that every corporation is required to keep (see BCL § 624 [a]) would be expected to provide some evidence of capitalization and disbursements, if not distribution of profits.

Respondents argue, appropriately, that the legal duty imposed on Ms. Pappas as the executrix of her husband's estate to properly complete estate documents must be considered in assessing the evidentiary significance of any omission in those documents. They cannot complain if the legal duty imposed on Respondents to keep "correct and complete" books and records of account is considered in assessing the evidentiary significance of the absence of documents that would bear on the flow of funds into, and out of, the corporations. The books and records required by statute to be maintained are specifically for the benefit of the shareholders, as well as those who do business with, or are affected by the operations of, the corporation.

Here, all of the parties agree that the corporate books and records were the responsibility of Mr. Fotinos. Respondents' contention that he should be relieved of the consequences of that responsibility because he is the sole shareholder assumes that which the books and records were intended to show, and, in any event, cannot be accepted in light of the statute and its purposes.

Assessing the Evidence/Arguments of the Parties

Most of the parties' respective arguments are reflected in the review of testimony and documentary evidence that appears above. In addition, Respondents assert that the claims of Ms. Pappas and Mr. Kalogiannis are retaliation for Mr. Fotinos's attempt, beginning in January 2002, to collect loans made to Mr. Pappas, and for Mr. Fotinos's rejection in September 2003 of Mr. Kalogiannis's request for a severance package. In support of these assertions, Respondents rely on Mr. Fotinos's testimony that neither Mr. Pappas, Ms. Pappas, nor Mr. Kalogiannis ever previously claimed an ownership interest in either Corfian or Epiros, and on testimony, including from Ms. Pappas, that no requests were ever made by any of the three for copies of the tax returns or financial statements of either corporation. The simple answer to the last point is that Petitioners should not be disadvantaged for trusting Mr. Fotinos, who, all agree, had responsibility for the corporate and financial affairs of Corfian, Epiros, 577 Baltic and 583 Baltic. [*15]

Mr. Kalogiannis disputes Mr. Fotinos's testimony that he never claimed an interest in the corporations until 2003. Mr. Kalogiannis testified that, beginning in 1992 and 1993, and on five or six occasions during the following ten years, he and Mr. Pappas complained to Mr. Fotinos about the amount of profits being distributed, "but not to kill each other." Mr. Kalogiannis testified further that the first time he heard from Mr. Fotinos that Mr. Fotinos disputed his claim of ownership was in September 2003, after an injury in July that prevented Mr. Kalogiannis from continuing to work.

As previously noted, the parties agree that Petitioners may be determined to be shareholders of either Corfian or Epiros or both, and a finding that they are shareholders of one does not in itself require a finding that they are shareholders of the other. Such a split determination, however, would challenge the credibility of all the parties, because Ms. Pappas and Mr. Kalogiannis testified that Messrs. Pappas and Kalogiannis were shareholders of both corporations, and Mr. Fotinos testified that they were shareholders of neither. That mutually exclusive testimony as to status cannot be explained as a misunderstanding of one or more of the parties, because the testimony was based upon mutually exclusive testimony as to the facts, in particular as to contribution to capital of the business conducted at 577 Baltic, and contribution to the purchase price of 583 Baltic. But since the parties are in agreement that a split determination is possible, the Court has assessed the evidence separately as to Corfian and Epiros, without ignoring the connections between them.

The Court has concluded, first, that Petitioners have met their burden of establishing by a preponderance of the credible evidence that it is more likely than not that Messrs. Pappas, Kalogiannis, and Fotinos were equal shareholders of the corporations formed to conduct business from 577 Baltic. Petitioners sufficiently established shareholder status on a prima facie basis, despite the absence of clear and substantial documentary evidence, and Respondents' evidence was insufficient to overcome that showing. In reaching these conclusions, the Court has given some weight, but not determinative weight, to Mr. Fotinos's failure to produce corporate records to the contrary, although he would be in the better position to produce corporate records as the person responsible for creating and maintaining them.

The Court considered all of the evidence, and, without describing or addressing all of it, found some of it particularly significant. Messrs. Pappas, Kalogiannis, and Fotinos had been shareholders in corporations conducting similar business before working at 577 Baltic, a property that they owned jointly and equally. Mr. Pappas, and particularly Mr. Fotinos, told non-party witnesses about joining the others in partnership. That Mr. Pappas would have made his contribution to capital from earnings over time, a detail that appears unlikely as recent fabrication, is consistent with the evidence on his cash position relative to Messrs. Kalogiannis and Fotinos at the time. Each of the three exercised significant executive and operational responsibility for the business at 577 Baltic.

In looking for details in which larger truths often lie, the Court finds particularly significant the testimony of Ms. Henry, the "one-person office," who over a six-year period at the [*16]beginning prepared the payroll at 577 Baltic, that she never prepared payroll checks for Messrs. Pappas, Kalogiannis, or Fotinos. Her testimony supports the view that the payments made to the individual parties as salary or wages or "bonuses" were, in substantial effect, distributions of earnings. The personal tax returns, limited as they are as to time and by incompleteness, support a consistency of treatment of the three in this important respect, even if not as to the amount of payment. Although Mr. Fotinos testified that, unlike the others, he took profits, none of his personal tax returns show that. Even as to amount, the identical amounts paid to Messrs. Pappas and Kalogiannis during four of the six years covered by the returns belie Mr. Fotinos's characterization of Messrs. Pappas and Kalogiannis as hourly workers.

The Court also finds particularly significant that, except for a distribution of loan proceeds in 1986 when 577 Baltic was financed through Atlantic Bank, Messrs. Pappas and Kalogiannis have received no revenue from their ownership of that property. Although Mr. Fotinos argues that the lease arrangements at 577 Baltic, which in this Court's experience were atypical, were actually beneficial to Messrs. Pappas and Kalogiannis, there is no evidence to support it, either in the way of fair rental value or otherwise. Rather, the lease arrangements, in terms and duration, were such as one might expect to see only where there is an identity of ownership of landlord and tenant. Indeed, Mr. Kalogiannis testified that he had no concern about the lease arrangements, which were determined by Mr. Fotinos, "because any amount that we would be putting, $1.00 to $1million, would be for the company, for all of us."

Although Petitioners' proof is not overwhelming, Mr. Fotinos's evidence to the contrary is insufficient to outweigh it. Putting aside for the moment the documents related to Mr. Pappas's estate, the documentary evidence introduced by Mr. Fotinos is variously incomplete, inconsistent, ambiguous or, at best, neutral. Reflecting his understanding that he is the sole owner of Corfian, the documents support his testimony, but do little more than that.

Respondents rely heavily, as they fairly might, on the Asset Questionnaire, Petition for Probate, and Estate Tax Certification. The Court's assessment of this evidence appears at length above. At this point, the Court would only state that, as they relate to Corfian Enterprises, Ltd. and the business conducted at 577 Baltic, the evidence is insufficient to outweigh Petitioners' evidence. Based upon all of the evidence, it seems likely that at least Messrs. Pappas and Kalogiannis considered the property at 577 Baltic and the business conducted there as essentially one and the same; and the Court, therefore, gives no great import to Mr. Pappas's and Ms. Pappas's failure to ascribe separate value to the "stock" or business interests in Corfian.

As to Epiros Realty, Ltd., however, the Court has concluded that Petitioners have not met their burden of establishing by a preponderance of the credible evidence that it is more likely than not that Messrs. Pappas, Kalogiannis, and Fotinos were equal shareholders of the corporation formed to purchase 583 Baltic. Again, without describing or addressing all of the evidence, the only substantial evidence supporting Petitioners' claim to shareholder status in Epiros is the testimony of Ms. Pappas and Mr. Kalogiannis that Messrs. Pappas, Kalogiannis, and Fotinos each contributed one-third of the purchase price for 583 Baltic. [*17]

Petitioners' claim is somewhat supported by the connections between Corfian and other corporations conducting business at 577 Baltic and Epiros; and by the inferences allowable from Mr. Fotinos's failure to produce corporate records, particularly the closing statements for the 1985 purchase of 583 Baltic and the 1987 financing. But the connections between the 577 Baltic corporations and Epiros, which were not, in any event, shown to be pervasive, are easily explained by other circumstances; and neither Ms. Pappas nor Mr. Kalogiannis produced any documentary evidence to support use of the $100,000 home equity lines of credit as the source of funds to purchase 583. Although the foundation for an adverse inference against them for the failure to produce any documents was not laid, it remains that supporting evidence is simply not there.

The Court ascribes greater significance to the Asset Questionnaire, Petition for Probate, and Estate Tax Certification when considered as to Epiros Realty, Ltd. and 583 Baltic than when considered as to Corfian Enterprises, Ltd. and 577 Baltic. Mr. Pappas's failure to include 583 among his real estate interests for purposes of the Questionnaire, and Ms. Pappas's failure to account for its value on the estate documents, can only be characterized as glaring, and has gone unexplained. The reasons that have been articulated for minimizing the significance of these "admissions" in the context of Corfian and 577 Baltic are not present as to Epiros and 583 Baltic. Mr. and Ms. Pappas could not have thought of the separate and substantial property at 583 to be one and the same as the property and business at 577.

Petitioners' claims as to Epiros Realty, Inc. do not benefit from the context out of which Corfian Enterprises, Ltd. grew. When in late 1982 Messrs. Pappas, Kalogiannis, and Fotinos came together to work at 577 Baltic, a property they equally owned, it was for the purpose of continuing the type of business in which they had previously been successful. There is no evidence of an agreement at that time to engage jointly in real estate investment. Indeed, the Court's conclusion as to Petitioners' shareholder status in Corfian is based in great measure on the purchase of 577 Baltic as primarily a place to conduct business, rather than an investment.

If more is needed to justify different conclusions as to Corfian Enterprises, Ltd. and Epiros Realty, Ltd., the Court notes that 583 Baltic is apparently the sole "tangible" asset of Epiros, and that for centuries the law has demanded with the Statute of Frauds (see General Obligations Law § 5-703) that there be particular proof before an interest in real property will be recognized. That stricter scrutiny has been applied to alleged oral agreements to transfer stock in a corporation whose sole asset was an interest in realty. (See Yenom Corp. v 155 Wooster Street Inc., 33 AD3d 67, 70-71 [1st Dept 2006]; Bergman v Krausz, 19 AD3d 186, 186-87 [1st Dept 2005].) Although the Statute of Frauds is not at issue here, the underlying policies demand caution in considering a claim that, at the end of the day, seeks recognition of an interest in real property.

Finally, Respondents argue that Petitioners are barred from obtaining dissolution by the statute of limitations and by doctrines of laches and waiver. These contentions were also made in Respondents' motion for summary dismissal, and Respondents make no showing that the evidence at the hearing adds anything to that presented on their motion. The Court recognizes, nonetheless, [*18]that denial of a motion for summary judgment does not ordinarily have law-of-the-case significance at trial. (See Cole v Lawrence Healthcare Admin. Servs., 15 AD3d 908, 909 [3d Dept 2005]; S.L. Benfica Transp., Inc. v Rainbow Media, Inc., 13 AD3d 348, 349 [2d Dept 2004].)

This is not an action for breach of a contract to issue shares of stock to Petitioners, or alleging damages in tort for fraud or conversion. (Compare Welwart v Dataware Electronics Corp., 277 AD2d 372 [2d Dept 2000]; Stern v BSL Development Corp., 163 AD2d 35 [1st Dept 1990]; Benstein v LaRue, 120 AD2d 476 [2d Dept 1986].) "The involuntary dissolution statute (Business Corporation Law, § 1104-a) permits dissolution when a corporation's controlling faction is found guilty of oppressive action' toward the complaining shareholders." (Matter of Judicial Disasolution of Kemp & Beatby, Inc., 64 NY2d 63, 69 [1984].)

A claim for dissolution pursuant to BCL § 1104-a is governed by the "so-called residual six-year period of limitations" (see State of New York v Cartelle Corp., 38 NY2d 83, 87 [1975]) found in CPLR 213 (1). (See Di Pace v Figueroa, 233 AD2d 949, 952 [3d Dept 1996]; Kermanshah v Kermanshah, 580 F Supp2d 247, ___ [SDNY 2008].) The period of limitations is measured from the "instances of alleged wrongdoing adverted to by [the petitioner] as grounds for dissolution." (See Di Pace v Figueroa, 223 AD2d at 952.)

Respondents' contention as to the statute of limitations is premature, and likewise any claim of prejudice to support application of the doctrine of laches must depend upon the asserted grounds for dissolution. Any contention by Respondents that Petitioners waived a right to dissolution grounded upon particular conduct by Mr. Fotinos (see Hadden v Consolidated Edison Co. of NY, 45 NY2d 466, 469 [1978]) must also await the next phase of the proceeding, as well as any retort by Petitioners that any acquiescence on their part was the consequence of purposeful concealment by Mr. Fotinos (see id. at 470.)

To the extent that the Verified Petition of Theano Pappas and the Cross-Claims of Theodoros Kalogiannis seek dissolution of Epiros Realty, Ltd., they are denied and dismissed for lack of standing.

The parties shall appear at 11:00 a.m. on February 20, 2009, Room 361, or such other date on which the parties might agree with the Court's approval, for a pre-hearing conference with respect to the grounds for dissolution of Corfian Enterprises, Ltd.

January 23, 2009____________________

Jack M. Battaglia

Justice, Supreme Court