2018 NY Slip Op 51958

Citation: 2018 NY Slip Op 51958
Jurisdiction: New York (state)
Source verification: cross_accepted_sealed
Original Source: https://www.nycourts.gov/reporter/3dseries/2018/2018_51958.htm ↗

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nature of those plans and how they contrasted with Dogwood LLC's.

This cause of action's allegation that "the Board," on an unspecified date in 2016, approved
Youngberg's purchase of a second unit, but instructed other shareholders who were selling units
not to consider selling to Blumenfeld, because the Board would not permit such a sale
(id., ¶ 171), is similarly devoid of factual support because it does not indicate who,
in particular, instructed whom not to consider such a sale, or when, or under what circumstances,
such statement was made. The amended 2017 complaint also fails to name the Board members at
that time, a deficiency that is repeated throughout the amended complaint, (id., ¶
61, 172, 228), despite the fact that Board members changed and where, as to El-Sawy, that
pleading merely alleges that he has been a Board member "since 2016." Id., ¶ 12.
Moreover, the amended 2017 [*20]complaint's prefatory
allegations demonstrate that this allegation has no factual underpinning. Specifically, the
amended 2017 complaint alleges that the unit owner Frank told Blumenfeld that he would never
consider selling his (second-floor) unit to him; that, "on information and belief," Frank told
Blumenfeld that the Board would never approve a sale to him; and that, "on information and
belief," "the Board instructed all shareholders" not to talk to Blumenfeld. Id.,
¶¶ 118-120. This Court notes in passing that, even if the Board declined to approve a
sale of a unit to Blumenfeld because of concern that he, along with Dogwood LLC, with its 30%
stake in Stable, would, with additional shares, exert undue influence over Stable's governance,
effectively freezing out the voices of other shareholders, that would not necessarily be improper.