Metered Appliances, Inc. v. 75 Owners Corp.

Defendant’s predecessor entered into a lease in 1989 with the third-party defendant, a corporation previously dissolved by the Secretary of State pursuant to Tax Law § 203-a for failure to pay franchise tax. While a corporate dissolution may not affect the corporation’s right to carry on business for the purpose of winding up its affairs (see, Bowditch v 57 Laight St. Corp., 111 Misc 2d 255 ), new business is prohibited absent reinstatement by payment of back taxes (see, Lorisa Capital Corp. v Gallo, 119 AD2d 99 , 110). As plaintiff did not seek reinstatement, the IAS Court properly held that it had no legal capacity to commence the action and therefore, dismissal of the complaint was warranted (see, B & O Realty Corp. v Chong-Yau Jeng, 201 AD2d 439 ). However, because the lease had been performed for the first five years of its 10-year term, defendant could not nullify the contract to the detriment of the delinquent plaintiff corporation "after receiving the benefits of performance” (Lo risa Capital Corp. v Gallo, supra, at 112 ). Thus, the court properly denied defendant and third-party plaintiff’s motion to declare the lease null and void and for ejectment. Concur — Milonas, J. P., Kupferman, Nardelli and Mazzarelli, JJ.