[Download] "Amfesco Industries v. David Greenblatt" by Supreme Court of New York ~ Book PDF Kindle ePub Free
eBook details
- Title: Amfesco Industries v. David Greenblatt
- Author : Supreme Court of New York
- Release Date : January 11, 1991
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 68 KB
Description
Plaintiff, the Official Secured Creditors' Committee of Amfesco Industries, Inc., instituted this action on behalf of the bankrupt corporation, seeking to compel defendants, the directors of the corporation, to account for their purported waste and mismanagement of corporate assets pursuant to BCL 720. The amended complaint alleged that in order to realize gains on insider sales of stock, defendants a) systematically falsified the corporation's books of account to conceal its losses and report fictitious profits b) furthered such false portrayal of the corporation by causing it to purchase costly new production facilities that they knew it could never use c) caused the corporation to incur debts which they knew it could never repay and d) deliberately failed to take any action to preserve the corporation's assets in the face of its known and mounting losses. Defendants moved to dismiss the amended complaint for failure to state a cause of action, for lack of standing and for failure to plead corporate waste and mismanagement with sufficient particularity. Specifically, defendants maintained that the causes of action alleged in the complaint belonged to third party stockholders and creditors of the corporation, not to the corporation itself, which was not damaged by any actions of defendants. Moreover, they claimed that their actions were protected by the business judgment rule. The Supreme Court agreed and dismissed the complaint.