Court Rejects Claim That Party’s Interest In Companies Was Reduced To 20%

On July 5, 2024, Justice Jennifer G. Schecter issued a Decision After Trial in Meyerson v. Minzer, Index No. 653730/2019. Defendant claimed, inter alia, that plaintiff’s interest in the several companies at issue (the “Companies”) had been reduced to 20% from 50%. In rejecting this claim, the Court explained:

The court rejects defendants' contention that Meyerson's interest in the Companies was reduced to 20%. This argument was made for the first time at trial based on documents that were not produced in discovery. Minzer testified to the 50-50 ownership at his deposition (see Dkt. 4 32 at 156). Yet, he testified at trial that he provided a document to his prior counsel evidencing an 80-20 ownership split (see id. at 158; but see Dkt. 59 at 4 [prior counsel arguing that these "cases are about the same business relationship between these two guys that chugged along for almost thirty years without benefit of a single written agreement"]). This document was not produced to plaintiffs during discovery. Nor did defendants disclose during discovery or in pretrial proceedings that they were taking the position that Meyerson only had a 20% interest. The court therefore precluded the introduction of this evidence (Dkt. 432 at 94-99, 158; see Part Rule 31). It would be extremely prejudicial to permit the introduction of such critical evidence for the first time at trial when it was always in defendants' possession, as withholding it prevented plaintiffs from probing its veracity during discovery (see Gottwald v Sebert, 204 AD3d 495 [1st Dept 2022]). That defendants were represented by different counsel during discovery is no excuse and does not mitigate the prejudice to plaintiffs. The court therefore finds based on the admissible evidence that Meyerson owns 50% of the Companies.

The attorneys at Schlam Stone & Dolan frequently litigate issues relating to business divorce and ownership of companies. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.