In re the Dissolution of Tosca Brick Oven Bread, Inc. , 665 N.Y.S.2d 252 ( 1997 )

Order, Supreme Court, Bronx County (Luis Gonzalez, J.), entered January 2, 1997, which granted petitioner’s motion to dissolve the corporation pursuant to Business Corporation Law § 1104-a and required respondents to provide a fall accounting of the assets, books and records of the corporation, unanimously reversed, on the law and the facts and in the exercise of discretion, without costs or disbursements, petitioner’s motion for dissolution denied, respondents’ cross motion for consolidation of this proceeding with Tosca Brick Oven Bread v Lubena (Bronx County index No. 6042/96) granted, and the matter remanded for further proceedings.

Business Corporation Law § 1118 (b) provides that if a shareholder elects to purchase the shares owned by the petitioner but is unable to agree with the petitioner upon the fair value of such shares, as here, the court, upon the application of the prospective purchaser, “may stay the proceedings * * * and determine the fair value of the petitioner’s shares as of the day prior to the date on which such petition was filed, exclusive of any element of value arising from such filing”. Despite respondents’ timely election to purchase petitioner’s shares and request for a hearing to determine the fair value of the shares, the IAS Court granted dissolution without holding such a hearing. In the circumstances, this was error.

In addition, the court erred in denying, sub silentio, respondents’ motion to consolidate this proceeding with Tosca Brick Oven Bread v Lubena. Respondents allege in that action, inter alia, that petitioner has misappropriated the corporation’s assets and destroyed its business in favor of a competing bakery that he opened. It is clear that the issues in that action are inextricably intertwined with the determination of “fair value” of petitioner’s shares. (See, Matter of Gene Barry One Hour Photo Process, 111 Misc 2d 559, 567.) Concur—Sullivan, J. P., Rosenberger, Rubin and Andrias, JJ.