Rockowitz v. Raab

Main and Mikoll, JJ., concur in part and dissent in part in a memorandum by Main, J. Main, J. (concurring in part and dissenting in part).

We respectfully disagree with the majority’s determination that plaintiff has not shown a likelihood of success on the merits and thus is not entitled to a preliminary injunction prohibiting Raab from selling his shares to the Berger sons or, in the alternative, prohibiting the Berger sons from exercising rights as to those shares. The granting of a preliminary injunction is within Supreme Court’s discretion, and this court’s review of such a grant is limited to a consideration of whether there has been an abuse of that discretion (see, Picotte Realty v Gallery of Homes, 66 AD2d 978; 7A Weinstein-Korn-Miller, NY Civ Prac ¶ 6301.13). In our opinion, Supreme Court did not abuse its discretion in granting this injunction. The construction of the 1976 shareholder agreement advanced by plaintiff, which would permit Raab to transfer his shares to his own heirs but not to Irwin Berger’s heirs, is entirely plausible and, if established at trial, would serve to foreclose the transfer from Raab to the Berger sons. Further, given plaintiff’s long-term commitment to the corporation and the lack of any evidence that the Berger sons would be harmed by the injunction, plaintiff has sufficiently demonstrated that he will suffer irreparable harm if the injunction is not granted and that the equities of the matter are in his favor. Accordingly, there being no abuse of discretion, we would affirm Supreme Court’s grant of a preliminary injunction in this regard.

We do agree, however, that Supreme Court erred in enjoining the special meeting of the board of directors to remove plaintiff as president. Since plaintiff’s request for this injunction is based entirely on his assertion that Mark Berger lacks the authority to act as an officer and director of the corporation, and since Supreme Court has already found that plaintiff has not demonstrated a likelihood of success in making this demonstration, it was error for Supreme Court to issue this injunction.