In re Dream Weaver Realty, Inc.

Summary

The court affirmed the judicial dissolution of Dream Weaver Realty, Inc. under Business Corporation Law § 1104 based on irreconcilable dissension and shareholder deadlock. It held that no hearing was required because there was no genuine dispute concerning the existence of the deadlock. The court also modified an order concerning disqualification of the petitioner’s attorney, directing that the motion be denied on the merits rather than as academic.

Holdings

1. Judicial dissolution was properly granted because the dissension between the two equal shareholders created an irreconcilable deadlock that precluded the corporation's successful and profitable conduct.
2. A hearing was not required because there was no contested issue determinative of the dissolution application and no genuine dispute concerning the existence of deadlock and dissension.
3. Supreme Court improperly resolved the dissolution petition before deciding the disqualification motion, but the motion should be denied on the merits because DeName failed to establish the required prior attorney-client relationship and substantial adversity and relatedness between the representations.

Questions Presented

1. Whether judicial dissolution of the closely held corporation was warranted under Business Corporation Law § 1104(a) because shareholder dissension produced an operational deadlock.
2. Whether Supreme Court could grant the dissolution petition without conducting a hearing.
3. Whether DeName's motion to disqualify the petitioner's attorney should have been decided on the merits rather than denied as academic, and whether disqualification was warranted.

Disposition

affirmed