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http://nycourts.law.com/CourtDocumentViewer.asp?view=Document&docID=50960

Justice Austin

PLAINTIFFS, HOLDERS of eight of 500 shares, brought a shareholder derivative action against Rockville Country Club (Country Club). Prior to dismissing the shareholder derivative action, the court denied Country Club’s motion under Business Corporation Law �627 to require plaintiffs to post security for expenses, including legal fees, in its defense of plaintiffs’ anticipated appeal. The court granted renewal of the Country Club’s motion for posting of a $50,000 security. It ruled that its order granting summary judgment, which established plaintiffs’ shares to be worth $3,500 each, created “new facts” and that the dissolution value of plaintiffs’ shares no longer constituted a basis for concluding that plaintiffs’ interest in Country Club exceeded $50,000. The court held that because plaintiffs own less than 5 percent of Country Club’s shares and the fair value of their shares is less than $50,000, plaintiffs should be required to post security as required by BCL �627, conditioned upon their perfection of an appeal.

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