MEMORANDUM AND ORDER
Appeal from an order of the Supreme Court (Auffredou, J.), entered July 28, 2020 in Warren County, which, in a proceeding pursuant to Business Corporation Law article 11, among other things, granted the receivers motion to confirm his final account for Twin Bay Village, Inc.
This case, involving the judicial dissolution of Twin Bay Village, Inc., a closely-held corporation owned by the parties, comes before us for a third time. In our initial decision, we affirmed a March 2016 order of Supreme Court (Muller, J.) directing the judicial dissolution of the corporation and the appointment of a receiver (153 A.D.3d 998, 60 N.Y.S.3d 560 [2017], lv denied 31 N.Y.3d 902, 2018 WL 1474023 [2018]).
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Thereafter, we affirmed a series of orders pertaining to the receiver, including an October 2016 order of Supreme Court (Auffredou, J.) ratifying a contract of sale of the resort property for $2.8 million (162 A.D.3d 1265, 79 N.Y.S.3d 702 [2018]).
Following the sale of the property, the receiver moved for approval of his final accounting, attaching schedules of assets received and disbursements, all of which were deducted from respondents’ 52% distributive share. Respondents filed objections and, in May 2019, upon its own initiative, Supreme Court referred the receivers accounting to a second referee for examination and report (see Business Corporation Law § 1216[c]). The second referee, upon review of the parties’ submissions, recommended approval of the proposed final accounting with minor corrections. The receiver, in turn, moved to confirm the report and respondents cross-moved to reject it. By order entered July 28, 2020, Supreme Court confirmed the second referees report in all respects, settling the receivers account. Respondents appeal.
We begin by rejecting respondents’ contention that Supreme Court erred in denying their claim against the corporation for unpaid loans, payroll checks and voided shares. In our initial decision, we expressly rejected these same claims, finding that Supreme Court (Muller, J.) “was fully justified in setting aside the 2004 issuance of 100 shares [to respondents] and respondents’ alleged loans to the corporation, as well as the bonuses and the salary checks that respondents chose not to cash” (153 A.D.3d at 1004, 60 N.Y.S.3d 560). We perceive no extraordinary circumstances to justify reopening these issues (see Eastern Mut. Ins. Co. v. Kleinke, 308 A.D.2d 676, 677, 764 N.Y.S.2d 660 [2003]; see generally People v. Cummings, 31 N.Y.3d 204, 208, 75 N.Y.S.3d 484, 99 N.E.3d 877 [2018]; People v. Evans, 94 N.Y.2d 499, 503, 706 N.Y.S.2d 678, 727 N.E.2d 1232 [2000]). Nor may respondents pursue a claim under a purported $14,000 mortgage between the corporation and respondent Tamara L. Chomiak, dated March 21, 2014. Supreme Court expressly declared that mortgage to be “null and void” in the March 2016 order. In our second decision, we explained that the court issued a May 2016 supplemental order to modify its March 2016 order by adding certain recording information (162 A.D.3d at 1266, 79 N.Y.S.3d 702). The appeal from that order was dismissed as untimely (id.).
We further conclude that the receiver properly denied respondents’ credit card claims and Chomiaks claim for a five percent handlers fee with respect to the sale of the resort. On the latter claim, in our second decision, we confirmed the contract of sale “without excluding the agreed-upon brokerage fees” and explained that “respondents fail[ed] to provide any record proof regarding their contention that Chomiak is entitled to a five percent handlers fee” (162 A.D.3d at 1268, 79 N.Y.S.3d 702). Beyond that, Chomiaks claim is based on the minutes of a June 1997 so-called emergency shareholders meeting, authorizing efforts to sell the corporation at a flexible $4.75 million price and a five percent handlers fee for Chomiak.
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No actual purchaser was identified, and no such private sale ever took place. The receiver conducted the actual sale pursuant to the order of Supreme Court (Auffredou, J.) and within his statutory authority (see Business Corporation Law § 1206[b][2]). Under these circumstances, Chomiak was not entitled to a handlers fee.
We reach the same conclusion with respect to respondents’ credit card claims. These claims pertain to charges that respondents incurred on their personal credit cards and a corporate card personally guaranteed by respondent Tatiana Chomiak Kasian between 2010 and 2019, ostensibly for corporate purposes. A permanent receiver is vested with title to all of the corporations property (see Business Corporation Law § 1206[a]). As such, respondents lacked any authority to incur debts against the corporation following the receivers appointment in April 2016. As to the claims predating the receivers appointment, given the lack of documentary evidence to validate these claims and the receivers “fiduciary responsibilities” to the corporation (Matter of Kane [Freedman–Tenenbaum], 75 N.Y.2d 511, 515, 554 N.Y.S.2d 457, 553 N.E.2d 1005 [1990] [internal quotation marks and citation omitted]), Supreme Court properly rejected these claims as well.
We do find merit in respondents’ contention that the receiver erred in his final account by deducting all of the receivers disbursements against respondents’ distributive share. In the March 2016 order, Supreme Court (Muller, J.) specified that petitioners were to receive 48% of the net proceeds of sale “with net proceeds defined as the proceeds after adjustments for property taxes, real estate transfer tax, fuel, title and tax searches, attorneys’ fees, brokers commissions and expenses normally associated with the sale of a commercial business and property ” (emphasis added). The court further ordered respondents “to indemnify petitioners and hold them harmless should any tax liability be assessed against them or the [c]orporation as a result of, based upon or relating to the findings in the report of the referee.” In its April 2016 order, the court instructed the receiver that “all of the fees, costs and expenses incurred by [him] ․ shall be paid entirely and exclusively from [r]espondents’ share of the distribution of the assets.” With these directives in place, the receiver, after deducting the “[e]xpenses of [s]ale” from the gross sale proceeds, charged the remaining disbursements from the receivership against respondents’ distributive share as set forth in Schedule B of the Final Account of Receiver.
These disbursements included the corporations entire capital gains tax on the sale. To charge that item entirely against respondents’ distributive share was in error and an over-literal application of Supreme Courts March and April 2016 orders. Schedule B reports combined federal and state estimated tax payments made in July and October 2018 totaling $573,000. To the extent that these payments are for increased tax liability attributable to “debt forgiveness,” they were properly charged to respondents in accord with the courts March 2016 order. That is not the case with respect to the capital gains tax, which would have accrued as a result of any sale, regardless of respondents’ misconduct. Because we are unable, on this record, to delineate between the taxes attributable to “debt forgiveness” and the amount due to the capital gains, the matter must be remitted to Supreme Court (Auffredou, J.) for a recalculation of the parties’ distributive shares.
Further adjustments are in order. The parties’ distributive shares were properly adjusted for real estate taxes paid at closing in the amount of $65,886.78 as an expense of sale pursuant to the March 2016 order of Supreme Court (Muller, J.). Inconsistently, however, the receiver assigned other disbursements for 2015 and 2016 property taxes paid in July 2016 entirely against respondents’ distributive share. Similarly, the receiver charged respondents with insurance, utilities and miscellaneous corporate taxes paid in 2016 and 2017. We do not find these charges attributable to respondents’ misconduct underlying the dissolution of the corporation. Nor, for that matter, should the refunds for room deposits be so characterized. As such, each of these expenses should also be divided according to the parties’ distributive shares.
Finally, Supreme Court (Auffredou, J.) duly exercised its discretion in holding back a partial distribution to respondents due to an unresolved issue of potential sales/occupancy tax attributable to unreported room rentals. We find respondents’ remaining contentions without merit.
ORDERED that the order is modified, on the law, without costs, by reversing so much thereof as confirmed that portion of the receivers account that deducted all of the receivers disbursements against the parties’ distributive share; matter remitted to the Supreme Court for further proceedings not inconsistent with this Courts decision; and, as so modified, affirmed.
FOOTNOTES
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. The receiver, Dennis J. Tarantino, was appointed by order entered April 6, 2016.
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. The minutes reveal that petitioners were not present at the meeting and there is no indication that petitioners were provided notice thereof.
Lynch, J.P.
Clark, Colangelo and Fisher, JJ., concur.