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BLUESTEIN v. OLDEN

United States District Court, S.D. New York


March 5, 2004.

SANFURD G. BLUESTEIN and SYLVIAKRUGMAN, Plaintiffs, -against- ROBERT OLDEN, Defendant

The opinion of the court was delivered by: RICHARD OWEN, Senior District Judge

OPINION AND ORDER

Three partners, plaintiffs Bluestein and Krugman and defendant Olden formed a partnership in 1978. Its principal asset has been and is a commercial building located at 1265 Broadway in New York, New York. Olden has operated Olden Camera and Lens Company, Inc., in a portion of the building for the last 26 years. (Olden Camera has been in the building over 60 years.)

In 2001, the two plaintiff partners herein, in accordance with the terms of the Partnership Agreement, sent a letter to Olden terminating the partnership. Since then, the partnership has been operating in dissolution.

  All three partners agree that the building should be sold, however they disagree as to whom it should be sold and for how much.

  Plaintiffs want to sell the building to a third party who has offered $15,400,000. The purchase price would be $15,200,000 if Olden were to remain in the building. Plaintiffs allege that Olden refuses to accept that offer and insists that plaintiffs sell him the building.

  Olden claims his latest offer is $9 million for plaintiffs' combined interest in the partnership. However, Olden's offer is less than would be the other partners' total share from the current offer the plaintiffs already have from a third party, and it also requires them to 1) release any claims they may have against Olden and his business; and 2) to relinquish any claim to profits from the partnership for 2002-2003. In addition, Olden's offer also contains a mortgage contingency. The offer that plaintiffs have from the third party contains none of these requirements.

  On February 2, 2004 plaintiffs filed an Order to Show Cause before me pursuant to Rule 65 of the Federal Rules of Civil Procedure requesting: 1) the appointment of plaintiff Bluestein as Liquidating and/or Winding Up Partner of the general partnership; 2) a direction that Olden cooperate in the liquidation of the assets of the partnership; and 3) enjoining Olden from entering into any new leases or renewing any leases for space in the building.

  Olden, to whom one is sympathetic, having certain longevity and emotional ties to the building, cannot however stand in the way of the maximization of the partnership's assets on dissolution, especially where the partnership has been properly terminated, according to their agreement.

  Jurisdiction in this Court is based on diversity. When all the partners to a partnership are before the district court, it is not necessary to name the partnership as an indispensable party, as Olden contends. Curley v. Brignoli, Curley & Roberts Assoc., 915 F.2d 81, 92 (2d Cir. 1990).

  The only specific authority presented to or found by the Court is Gilmore v. Ham, 142 N.Y. l (1894), which is now over a century old, where the New York Court of Appeals appointed one of two partners (the other partner having vanished) to become the liquidating partner and authorized him to close up the business. At least the power exists.

  Here, the two departing partners have agreed the liquidating partner should be Bluestein. Partner Olden — who wants to involve himself in an understandably self — perpetuating role — opposes. But if not one of the two departing, then who?

  Accordingly, Bluestein is hereby designated as liquidating partner with authority to terminate under New York Partnership Law §§ 68 and 69.

  I thus grant the injunctive relief sought by this motion to ensure that an equitable distribution of the partnership's assets can be achieved Based upon these findings, I hereby order the following relief:

1. Sanford G. Bluestein is appointed Liquidating and/or Winding — up Partner of the general partnership known as 1265 Broadway Associates with sole authority to liquidate all the assets of the partnership, including the building located at 1265 Broadway, New York, New York, with the proceeds of the partnership assets be divided, pursuant to Partnership Law, after payment of all just debts;
2. Olden is directed to cooperate in the liquidation of the assets of the partnership including, among other things, by stating with specificity whether the representations and covenants set forth in that certain purchase contract may be made by the partnership;
3. Olden is enjoined from entering into any new leases or renewing any leases for space in the building located at 1265 Broadway, New York, New York or
entering into or renewing other agreements affecting the building located at 1265 Broadway, New York, New York.

  I retain jurisdiction to accomplish the foregoing. Defendant's oral application made at oral argument for a stay hereof should I find against him is denied.

  So Ordered.

20040305

© 1992-2004 VersusLaw Inc.



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