Opinion
April 27, 1998
Appeal from the Supreme Court, Suffolk County (Seidell, J.).
Ordered that the order dated October 15, 1997, is modified, on the law, by deleting the provisions thereof granting the petition, directing the appointment of a temporary receiver, directing the receiver to select an independent appraiser to determine the fair value of the petitioners' shares of stock, and directing the appellants to purchase the petitioners' shares of stock within six months after the completion of the appraiser's report; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements; and it is further,
Ordered that the order entered October 8, 1997, is reversed, on the law, without costs or disbursements, the appellants' motion is granted, and the time within which they may elect to purchase the petitioners' shares of stock pursuant to Business Corporation Law § 1118 is extended to 20 days after service on them of a copy of this decision and order, with notice of entry.
The Supreme Court properly concluded that the petition states a cause of action for dissolution of the corporation at issue pursuant to Business Corporation Law § 1104-a (a) (1) and (2) on the grounds of "oppressive actions" and corporate waste (see, Matter of Kemp Beatley, 64 N.Y.2d 63). The court erred, however, in granting the petition and directing a buy-out without conducting a hearing (see, Business Corporation Law § 1109). The conflicting affidavits submitted by the parties raise questions of fact regarding the merits of the petition and the appropriate remedy (see, Matter of Kournianos [H.M.G., Inc.], 175 A.D.2d 129; Matter of MacDougall [Manhattan Ad Hoc Housewares], 150 A.D.2d 160; Matter of Rosen [Hoftella Enters.], 102 A.D.2d 855).
The court further erred in appointing a temporary receiver for the corporation. The petitioners failed to demonstrate that the appointment of a receiver is necessary to preserve the assets of the corporation, operate the business, or protect the interests of the parties (see, Business Corporation Law § 1113; Matter of Hessert v. Brooklyn Home Dialysis Training Ctr., 231 A.D.2d 719).
Under the circumstances, the court should have afforded the appellants additional time within which to make an election to purchase the petitioners' shares of stock (see, Business Corporation Law § 1118 [a]).
The appellants' remaining contentions are without merit.
O'Brien, J.P., Santucci, Altman and Friedmann, JJ., concur.