Dissolved Corporation Can Still Bring Lawsuit

On October 22, 2020, Justice Borrok of the New York County Commercial Division issued a decision in 3B Assoc. LLC v. Ecommission Solutions, LLC, 2020 NY Slip Op. 33512(U), holding that a dissolved corporation still can bring a lawsuit, explaining:

Moreover, 3B Associates' proposed amendment is not palpably improper or devoid of merit insofar as it seeks to add a party that has an interest. A dissolved corporation shall not carry on any business except for the purpose of winding up its affairs, and thus possesses limited powers to fulfill or discharge its contracts, collect its assets, sell its assets for cash at public or private sale, discharge or pay its liabilities, and do all other acts appropriate to liquidate its business. Furthermore, dissolution of a corporation shall not affect any remedy available to or against such corporation for any right or claim existing before such dissolution. Business Corporation Law also does not provide a specific timeframe for winding up a dissolved corporation's affairs such that the court is to imply a reasonable period of time.

(Internal quotations and citations omitted).

Standing, in simple terms, means being the right person (or among the right persons) to seek relief from a court. Usually, it turns on the question of who was harmed, but here it turned on the question of whether a corporation that had been dissolved still could bring a lawsuit. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding who the right person is to bring a lawsuit.