IN RE APPLICATION OF SAKOW

This is an action seeking dissolution of a corporation pursuant to Business Corporation Law § 1104. Petitioner alleged that she owned 50% of the stock, as required to demonstrate standing. The IAS court properly found, however, that one share of the stock claimed by petitioner had been sold, leaving petitioner short of the 50% stock ownership required, depriving her of standing to bring this action and requiring dismissal. Petitioner's conclusory claim that the share transfer was a sham did not raise issues of fact warranting a hearing (see, Goodman v. Lovett, 200 A.D.2d 670, lv dismissed 84 N.Y.2d 850). Having dismissed the petition, the IAS court sua sponte converted the proceeding to one brought under Business Corporation Law § 1104-a. The right of appraisal provided by Business Corporation Law § 1118 applies only where dissolution is sought under the oppression statute, Business Corporation Law § 1104-a (Matter of Cristo Brothers, Inc., 64 N.Y.2d 975; Matter of Duffy, 97 A.D.2d 694; Matter of Levitt, 109 A.D.2d 502, 507). Petitioner sought statutory dissolution under a section which does not afford respondents a buy-out remedy. In her reply, petitioner specifically objected to consideration of her petition as one seeking relief under Business Corporation Law § 1104-a and denied she was subject to a buy-out. The IAS court did not have the power to convert petitioner's action into a claim requesting relief she had not sought (see, Fedele v. Seybert, 250 A.D.2d 519; Matter of Parveen, 259 A.D.2d 389). Since there was no appraisal remedy as the petition was properly dismissed, the enforcement proceedings were a nullity.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.