Papers Considered on this Motion Numbered Notice of Motion to Dismiss, Affirmation of Hillary A. Frommer, Esq., in Support, with Exhibits 1,2 Affirmation of Stephanie T. Seiffert, Esq., in Opposition to Motion to Dismiss, with Exhibits, Memorandum of Law in Opposition to Motion to Dismiss 3,4 Reply Affirmation of Hillary A. Frommer, Esq., in Further Support of Motion to Dismiss, with Exhibits 5 DECISION At the call of the calendar on June 17, 2022, the court granted in part and denied in part the motion by the children of decedent Philippe Buhannic for an order dismissing the petition of Natalie Haimo and Luc Buhannic, as fiduciaries of decedent’s estate, for permission to enter into a certain stock transaction. This court had imposed restrictions on the letters of the fiduciaries which prohibited them from selling or otherwise disposing of estate assets until further order of the court. The petition seeks, among other relief, authorization for the fiduciaries to “negotiate with TradingScreen to sell the Shares held by NDPB,” S.A., a company solely owned by decedent, “and to execute such documentation as TradingScreen may reasonably require to complete such transaction.” Petitioners ask the court, in effect, to lift the restrictions on their letters to allow them to engage in this transaction. Petitioners also seek permission “to use the cash distributions from NDPB to pay the outstanding and ongoing Mortgage obligations on the Co-op [apartment owned by a trust established by decedent for the benefit of movants, who are decedent's children] and ongoing expenses of the Co-op” as well as to pay administration expenses and debts of decedent’s estate. Movants seek dismissal of the petition on several grounds but their main argument is that the court has no power to grant the relief sought in the petition because the transaction concerning the TradingScreen shares has been completed and a check for $756,699.40 issued. In essence, movants argue that there is no estate asset to be sold. In the Reply Affirmation of their counsel, however, movants clarify that they do not oppose the collection by the fiduciaries of the funds from TradingScreen but object to the fiduciaries’ ability to use those funds to pay administration expenses and estate debts. Movants propose, as an alternative to dismissal, “an order directing the Fiduciaries (1) to collect the TradingScreen funds; (2) to allocate and apply $300,000 of those funds to pay (a) the monthly Co-Op maintenance, utilities, assessments, and other fees charged by the managing agent; (b) the cleaning, staging, and other fees appurtenant to the marketing and sale of the Co-Op; (c) the monthly mortgage; (d) the costs associated with the appraisal, moving, and storage of Estate tangible property; and (3) to deposit the balance of the TradingScreen funds into an attorney escrow account with the Fiduciary’s counsel to be used upon written agreement of the parties or by further order of the Court.” In light of the parties’ contentious relationship and the extensive litigation that has snared this estate, the fiduciaries cannot be blamed for filing a petition seeking authorization to engage in a transaction (whether characterized as a sale of shares or the consummation of a forced acquisition of those shares), that arguably is prohibited by the restrictions on their letters. The motion to dismiss is thus denied to the extent that the petition seeks, in effect, the lifting of restrictions on the fiduciaries’ letters in order to complete the transaction with TradingScreen and to collect the funds.1 If permission is needed to enter the transaction, such permission is granted, and the fiduciaries are authorized to execute such documentation as TradingScreen or its successor in interest may reasonably require to complete such transaction. However, in view of the movants’ concerns over the fiduciaries’ use of the funds, the court will impose a bond. The parties have advised the court that they have agreed that $300,000 of the proceeds may be used to pay the expenses relating to the Co-op and have arranged for joint control over that portion. Accordingly, the court imposes a bond in the amount of $460,000, representing the approximate value of the balance of the funds to be collected by the fiduciaries. Concerning Petitioners’ request to use the TradingScreen funds to pay outstanding debts of the estate and administration expenses, the motion to dismiss is granted. Those are activities in which estate fiduciaries must engage in order to discharge their duties (EPTL 11-1.1 [b][22]; SCPA 1412 [3][a]; SCPA 903 [1]) and they must use their discretion to do so. The court will not interfere with such discretion. Additionally, the court’s authorization to exercise these powers is not required. Movants’ request for an order directing the fiduciaries to bear the legal costs of the filing and prosecution of their petition is denied. Upon their posting the bond as provided herein, the first sentence of the restrictions on the letters previously issued to Luc Buhannic and Natalie Haimo shall be amended to read as follows: “The letters shall be restricted to prohibit either fiduciary from selling, encumbering, or otherwise disposing of any of the testamentary assets until further order of the court, except that this restriction shall not apply to, and the fiduciaries shall be permitted to engage in and complete, a transaction for the reacquisition of the shares in TradingScreen, Inc., or its successor in interest, held by decedent’s wholly owned company, NDPB, S.A.” This decision constitutes the order of the court. The restrictions on the letters shall be amended accordingly. Dated: August 18, 2022
