In Re Radom & Neidorff, Inc

119 N.E. 2d 563 (1954)

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Nature of the Case

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Facts

The company has been, for many years in the business of lithographing or printing musical compositions. Henry Neidorff and David Radom were the sole stockholders. Henry's will bequeathed his stock to his wife, Anna (David's brother). David and Anna had been unfriendly, and five months after Henry's death, David sued for dissolution. The corporation is solvent and its operations successful, but that, since Henry Neidorff's death, his widow (D) has refused to co-operate. D refuses to sign P's salary checks, leaving him without salary, although he has the sole burden of running the business. Election of any directors, at a stockholders' meeting held for that purpose, proved impossible. P contends that while her husband was alive, the two owners had each drawn about $25,000 per year from the corporation. Shortly after the death, P had asked her to allow him alone to sign all checks, which request she refused, that he had then offered her $75,000 for her stock, and, on her rejection thereof, had threatened to have the corporation dissolved and to buy it in at a low price or, if she should be the purchaser, that he would start a competing business. P petitioned for dissolution. There was a will contest to determine ownership of Henry's stock. That delayed the dissolution petition for 3 years. During this time of deadlock, the corporation's profits before taxes had totaled about $242,000, or an annual average of about $71,000, on a gross annual business of about $250,000, and that the corporation had, in 1953, about $300,000 on deposit in banks. The two equal stockholders dislike and distrust each other, but the corporation is flourishing. The Appellate Division reversed a lower court order for dissolution holding that not only have the corporation's activities not been paralyzed but that its profits have increased and its assets trebled during the pendency of this proceeding, that the failure of petitioner to receive his salary did not frustrate the corporate business and was remediable by means other than dissolution. This appeal resulted.