Pisane v. Feig

KINGS COUNTY
Creditors and Debtors Rights

, New York Law Journal

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Justice Carolyn Demarest

Defendant moved to modify a prior court order. Plaintiff previously moved to vacate an arbitration award in which an arbitrator determined the value of plaintiff's shares under a shareholder agreement and ordered the parties to close on defendant's purchase of those shares. Defendant executed a promissory note. The court confirmed the arbitration award and granted attorney fees to defendant for costs incurred in defending against plaintiffs' motion to vacate. Plaintiff sought to set off the judgment amount against defendant's existing note obligation. The court noted Debtors' and Creditors' Law §151 provided authority to a debtor to set off its debt against unmatured debts owed to it by a creditor. It found plaintiff's method for calculating the set off upon issuance of the credit invoice to defendant was the more equitable and appropriate formula under §151. The court stated the shareholder agreement contemplated regular monthly payments to the shareholder being bought out, which defendant's method of set off would eliminate, and as the note provided for prepayment of the principal, alteration of the schedule was not expressly prohibited by the terms. Thus, defendant's motion was denied, and plaintiff's motion granted.

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