2014 New York Laws
GBS - General Business
Article 26 - (390 - 399-ZZZ) MISCELLANEOUS
394 - Lost or destroyed certificate of stock.
394. Lost or destroyed certificate of stock. 1. The owner of shares represented by a lost or destroyed certificate of stock, if the corporation shall refuse to issue a new certificate in place thereof, may apply to the supreme court, at any special term held in the district where he resides, or in which the office of the corporation is located, for an order requiring the corporation to show cause why it should not be required to issue a new certificate in place of the one lost or destroyed. The application shall be by petition, duly verified by the owner, stating that it is made pursuant to this section, the name of the corporation, the number and date of the certificate and to whom issued, if known or if it can be ascertained by the petitioner, the number of shares represented thereby, and as particular a statement of the circumstances attending such loss or destruction as the petitioner can give. Upon the presentation of the petition the court shall make an order requiring the corporation to show cause, at a time and place therein mentioned, why it should not issue a new certificate of stock in place of the one described in the petition. A copy of the petition and order shall be served on the corporation, in the manner prescribed for the service of a summons in an action against a corporation, at least twenty days before the return of the order to show cause. Notice of the application shall be given to the stockholder of record if he is a person other than the petitioner and if he is known to the petitioner, and to such other persons as the court may direct; such notice shall be given in such manner by publication or otherwise as the court may direct.
2. Upon the return of the order, with proof of due service thereof, the court shall inquire into the truth of the allegations of the petition and hear the proofs of the parties in regard thereto. The court, if satisfied that the petitioner is the lawful owner of the shares, or any part thereof, described in the petition, and that the certificate therefor has been lost or destroyed and cannot after due diligence be found, and that no sufficient cause has been shown why a new certificate should not be issued, shall make an order requiring the corporation, within a time specified, to issue and deliver to the petitioner a new certificate for the number of shares specified in the order, upon the petitioner depositing in such public office as the court may designate security or a bond to indemnify the corporation against any liability or expense which it may incur by reason of the original certificate remaining outstanding. Such security or bond shall be in an amount which shall appear to the court sufficient in the circumstances of the case to protect the interests of any persons to whom the corporation may incur liability, and shall be in such form and with such sureties as the court shall approve. The court may also in its discretion order the payment of the corporation's reasonable costs and counsel fees.
3. The issuance of a new certificate under an order of the court shall not relieve the corporation from liability in damages to a transferee of the original certificate in good faith and for value. The corporation shall not be liable to any such transferee in an amount in excess of the amount of the bond or the amount of the security required to be deposited.
4. In case of conflict between this section and section 8--405 or 8--406 of the uniform commercial code, this section shall control.
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