Madison Associates purchased control of the majority of shares of 79 Realty Corp. from the Kimmelmans and the Zauders, who then resigned as directors.

The Alpert group, which owned the remaining 26 percent of 79 Realty refused to sell their shares. Partners of Madison Associates replaced the Kimmelmans and Zauders as directors of 79 Realty Corp., and as controlling directors, they approved a plan to merge 79 Realty Corp. with the Williams Street Corp., which was owned by Madison Associates. A shareholders’ meeting was called, and the merger was approved by two-thirds of the shareholders. The Alpert group’s shares were then forcibly canceled, with the price paid for these shares determined at their fair market value. The Alpert group brought suit contending the merger was unlawful because the sole purpose was to benefit the Madison Associates. Decide. [Alpert v 28 Williams Street Corp., 473 NE2d 19 (NY)]

1052 Part 7 Business Organizations AppendixLO1