Appellate Division, Fourth Department
Piercing the Corporate Veil
Creditor/Debtor — Lease Agreement
A&M Global Management Corp. v. Northtown Urology Associates
Appealed from Supreme Court, Erie County
Background: The defendant leased office space from the plaintiff for a 10-year term. Two years later, one of the defendant’s shareholders began negotiations to move his business out of state and eventually did so after purchasing equipment from the business. The other shareholder began employment with another urology practice. The plaintiffs commenced an action for breach of the lease agreement. The defendant shareholder appealed from an award made against them personally on a theory of piercing the corporate veil, the plaintiff also cross-appealed.
Ruling: The Appellate Division affirmed. The court held that the record established that the shareholder made no effort to continue the business after his partner left. The Appellate Division also held that, even assuming there was a close relationship between the defendant and the first shareholder, the selling of the medical equipment and office furniture was not indicative of a fraudulent conveyance.
Michael J. Willett of Damon Morey for the defendant-appellant-respondent; Robert Michalak of Hogan Willig for the plaintiff-respondent-appellant; Earl K. Cantwell of Hurwitz & Fine for the defendant-respondent