Wind it up

BR Clinton Chiropractic, P.C. v GEICO Ins. Co.., 2020 NY Slip Op 20291 (App. Term 2d Dept. 2020)

(1) “Pursuant to Business Corporation Law §§ 1509 and 1510, when professionals lose their license, they are required to sever 70 Misc 3d at 28} their ties with the professional service corporation. If the professional does not sever those ties, section 1509 grants the professional service corporation the authority to force the professional to do so, and failure to enforce this requirement constitutes a ground for forfeiture of the professional service corporation’s certificate of incorporation and its dissolution. Section 1510, among other things, directs the professional service corporation to repurchase the professional’s shares within six months of his disqualification. None of these requirements is self-executing.”

(2) “Here, the professional has not complied with section 1509 and the professional service corporation has not repurchased his shares pursuant to section 1510, so the professional remains the corporation’s sole shareholder. No one has moved for forfeiture of plaintiff’s certificate of incorporation or its dissolution. Despite revocation of its shareholder’s professional license, plaintiff continued to exist and is entitled to wind up its affairs and seek to recover no-fault benefits for the services it rendered to its assignor prior to June 28, 2010”

(3) “Section 1510 directs plaintiff to take actions that it concededly failed to do. It does not hold, however, that such a violation makes otherwise valid contracts unenforceable or that the{**70 Misc 3d at 29} corporation’s debtor should be entitled to withhold payment for services legally rendered”

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