## Facts

- Radom & Neidorff, Inc. was a closely held New York corporation engaged in lithographing/printing musical compositions and operated successfully.
- For decades, Henry Neidorff and David Radom each owned half the shares; after Henry’s death, his sister Anna Neidorff inherited his shares, leaving Radom and Anna as 50/50 shareholders.
- Radom and Anna were personally hostile and could not agree on corporate governance matters.
- Radom alleged Anna refused to cooperate with him as president and refused to sign his salary checks, leaving him unpaid while he ran the business.
- At a shareholders’ meeting, the two shareholders allegedly could not elect directors because their votes were evenly split.
- The corporation remained solvent and profitable; during the litigation, profits increased and assets reportedly grew substantially.

## Issues

1. Whether a court must dissolve a corporation under N.Y. General Corporation Law § 103 when equal shareholders cannot elect directors due to conflict, despite continued profitable operations.
2. Whether § 103 makes dissolution mandatory upon a showing of stockholder deadlock, or instead permits dissolution only in the court’s discretion based on the corporation’s condition and the effect on shareholders and the public.

## Decision

- The Court of Appeals affirmed dismissal of the dissolution petition.
- The court held that § 103 authorizes a dissolution petition in specified circumstances but does not require dissolution whenever those circumstances are alleged.
- The court concluded dissolution was not appropriate where the corporation was thriving and the alleged deadlock did not impair the business’s ability to operate.
- The court accepted dismissal without an evidentiary reference, reasoning that the allegations, even if assumed true, did not justify the extraordinary remedy of dissolution under the circumstances.
- A dissent would have required development of a factual record before denying dissolution relief.

## Legal Principles

- Statutory authorization to petition for dissolution based on deadlock does not make dissolution automatic; the remedy is discretionary.
- Judicial dissolution is generally reserved for situations where governance conflict materially frustrates the corporation’s operation or purpose, not merely where shareholders are personally antagonistic.
- Courts may consider the corporation’s ongoing profitability and stability, and the likely effects of dissolution on shareholders and the public, in deciding whether dissolution is warranted.
- Disputes such as nonpayment of salary may be addressed through remedies short of dissolution when the enterprise remains viable.

## Conclusion

The court refused to dissolve a solvent, profitable closely held corporation despite equal-owner hostility and an alleged inability to elect directors, holding that deadlock provisions permit but do not compel dissolution and that dissolution is inappropriate absent a showing that the deadlock functionally disables the business.


In re Radom & Neidorff, Inc., 307 N.Y. 1, 119 N.E.2d 563 (N.Y. 1954)