AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Attorney(S)
Judges
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Attorney(S)
Judges

PDK LABS, INC., PLAINTIFF, v. PERRY KRAPE, DEFENDANT; PERRY D. KRAPE, ETC., COUNTERCLAIM PLAINTIFF-APPELLANT-RESPONDENT, MICHAEL KRASNOFF, ET AL., COUNTERCLAIM DEFENDANTS-RESPONDENTS-APPELLANTS.

DECISION ORDER

ORDERED that the cross appeal by the counterclaim defendant PDK Labs, Inc., is dismissed as abandoned, without costs or disbursements and it is further,

ORDERED that the order is affirmed insofar as appealed from and cross-appealed from by the counterclaim defendants Michael Krasnoff and Ira Helman, without costs or disbursements.

Business Corporation Law § 626(c) provides that the plaintiff in a shareholders' derivative action "shall set forth with particularity the efforts of the plaintiff to secure the initiation of such action by the board [of directors] or the reason for not making such effort". The question of whether the demand requirement of Business Corporation Law § 626(c) has been met is a matter within the discretion of the court (see, Barr v. Wackman, 36 N.Y.2d 371; Lewis v. Akers, 227 A.D.2d 595). The Supreme Court providently exercised its discretion in concluding that the derivative counterclaims fail to set forth with any particularity that a demand would be futile (see, Marx v. Akers, 88 N.Y.2d 189; Lewis v. Akers, 227 A.D.2d 595; Bildstein v. Atwater, 222 A.D.2d 545). Accordingly, the derivative counterclaims were properly dismissed.

The third counterclaim alleging breach of fiduciary duties by the individual counterclaim defendants in their capacities as directors and/or officers of PDK Labs, Inc., was properly sustained, as it contained sufficient factual allegations to meet the specificity requirement of CPLR 3016(b). Moreover, contrary to the counterclaim defendants' contentions, a shareholder may assert individual claims for breach of fiduciary duty (see, Matter of Buckley [Wild Oaks Park], 44 N.Y.2d 560; Schwartz v. Marien, 37 N.Y.2d 487; Aronson v. Crane, 145 A.D.2d 455; Goldberg v. Goldberg, 139 A.D.2d 695).

The parties' remaining contentions are without merit.

Use AI to get other relevant cases.

Comments

PDK LABS v. KRAPE
(Nov 6, 2000)