Opinion
December 21, 1965
Order entered May 18, 1965 denying, with leave to renew, appellants' application for an order permitting inspection of books and records of respondent American Fabrics Company, unanimously reversed, on the law and on the facts and in the exercise of discretion, and the application granted, with $30 costs and disbursements to appellants. Petitioners, a family group, own 49.78% of the stock of the respondent corporation; and that circumstance alone should entitle them to examine its books and records unless very cogent reasons are presented for denying such relief (cf. Matter of Bernstein v. Garden Hill Estates, 24 A.D.2d 972). They certainly cannot be found in the alleged history of the misconduct of a deceased relative of plaintiffs some 10 years ago, in the steadily deteriorating relationship of the parties since then, nor in the series of lawsuits launched by various members of plaintiffs' group. The fact remains that petitioners have had no representation on the board of directors or access to the books and records of the corporation for the past five years. It should also be noted that the stockholders' derivative action to which Special Term referred appears to relate to a period antedating that for which inspection is sought, and the trial and disposition of that action is not likely to furnish a substitute for the information sought herein. Settle order on notice.
Concur — Botein, P.J., Breitel, McNally and Staley, JJ.