Bienstock v Greycroft Partners, L.P.

Bienstock v Greycroft Partners, L.P. 2015 NY Slip Op 04032 Decided on May 12, 2015 Appellate Division, First Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on May 12, 2015
Gonzalez, P.J., Mazzarelli, DeGrasse, Kapnick, JJ.
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[*1] Terry S. Bienstock, Petitioner-Respondent,

v

Greycroft Partners, L.P., Respondent-Appellant.

Dilworth Paxson LLP, New York (Gregory A. Blue of counsel), for appellant.

Herrick, Feinstein LLP, New York (Justin B. Singer of counsel), for respondent.

Order, Supreme Court, New York County (Milton A. Tingling, J.), entered August 22, 2014, which granted the petition to turn over funds received by respondent Greycroft Partners, L.P. (Greycroft), as subject to a constructive trust imposed by the Delaware Chancery Court, and granted petitioner's request for attorneys' fees, unanimously modified, on the law, to the extent of denying petitioner's request for attorneys' fees, and otherwise affirmed, without costs. Appeal from order, same court and Justice, entered July 14, 2014, unanimously dismissed, without costs, as taken from an order that was superseded by the August 22, 2014 order; and appeal from order, same court and Justice, entered September 18, 2014, which, upon reargument, adhered to the initial determination, unanimously dismissed, without costs, as academic.

Petitioner Bienstock established his superior right to the proceeds of the asset sale distributed to respondent Greycroft (see National Union Fire Ins. Co. of Pittsburgh, Pa. v Eland Motor Car Co., 85 NY2d 725, 729 [1995]; CPLR 5225[b]), a third party transferee of funds that received the funds at issue, which were subject to a constructive trust imposed by the Delaware Chancery Court (see Schock v Nash , 732 A2d 217, 232-233 [Del 1999]; Harris Trust and Sav. Bank v Salomon Smith Barney, Inc. , 530 US 238, 250 [2000]).

The motion court erred in awarding attorneys' fees since this is a turnover proceeding brought pursuant to CPLR 5225(b) as opposed to an action or proceeding to set aside a fraudulent conveyance (compare Debtor and Creditor Law § 276-a).

THIS CONSTITUTES THE DECISION AND ORDER

OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: MAY 12, 2015

CLERK