Dissolved Corporation Can Go On with Holdover Case

An owner, which was a New York corporation, brought a holdover proceeding to evict a tenant from its space. During the proceeding, the New York State tax department dissolved the owner because it didn't pay its franchise taxes. The tenant asked the court to either dismiss the owner's holdover proceeding or postpone it until the owner could prove that it was no longer dissolved.

A New York court denied the tenant's requests. The owner's “dissolved status under these circumstances has no effect on the continuation of these proceedings,” said the court. The court pointed out that under New York law, corporations that are dissolved continue to exist for the purpose of winding up their affairs, including filing lawsuits. So the law specifically authorized the owner to continue with its proceeding, said the court [Haslacha Inc. v. Jubilee Inc.].