## Facts

- Ruben Torres was a stockholder in a corporation.
- Debra J. Speiser was another shareholder in the same corporation.
- Torres sold his shares to Speiser.
- Torres later contended the agreed price for the shares was less than the shares’ par value.
- As part of the overall arrangement, Speiser agreed to help Torres establish another business.
- Speiser also promised to form a corporation that would own that new business.
- The stock of the new corporation was to be divided between Torres and Speiser, with the division to be determined between them.
- Torres claimed the alleged defect in the stock sale (sale below par value) could not be cured by Speiser’s promised future consideration.
- Torres moved for partial summary judgment, and the trial court denied the motion.

## Issues

1. Does New York Business Corporation Law § 504 invalidate a resale of already issued shares between shareholders where the price is allegedly below par value?
2. Was Torres entitled to partial summary judgment on the theory that Speiser’s promises regarding the formation and shared ownership of a new corporation were too indefinite to be enforceable, such that they could not supply valid consideration?
3. Did the record present triable issues of fact—such as evidence bearing on performance of the parties’ arrangement—requiring denial of partial summary judgment?

## Decision

- The Appellate Division affirmed the order denying Torres’s motion for partial summary judgment.
- The court held BCL § 504 did not apply because the transaction involved a resale of issued shares between shareholders, not a corporate issuance of stock.
- The court further held that summary judgment was not warranted on the claim that the parties’ business-formation arrangement was unenforceably indefinite, because the record raised issues of fact that could not be resolved as a matter of law on the motion.

## Legal Principles

- BCL § 504 governs the consideration required for a corporation’s issuance of shares; it does not invalidate private resales of previously issued shares between shareholders, even if the resale price is alleged to be below par value.
- Summary judgment is improper where material issues of fact exist regarding the parties’ agreement and related conduct.
- Whether an arrangement is too indefinite to be enforceable may depend on the facts shown in the record, including evidence of the parties’ actions consistent with the claimed agreement.

## Conclusion

In Torres v. Speiser, the court refused to invalidate a shareholder-to-shareholder stock sale under BCL § 504, explaining that the statute addresses corporate issuances rather than resales of issued shares. The court also held that Torres was not entitled to partial summary judgment based on alleged indefiniteness in Speiser’s related business promises because factual disputes in the record required the claims to proceed.


Torres v. Speiser, 701 N.Y.S.2d 360 (2000)