SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK
COUNTY

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In the Matter of the Application of BLEECKER CHARLES CO.,          : Index No.: 110835/02
                                                                   :
                              Petitioner,                          : Motion Seq. No.: 001
                                                                   :
For the Inspection of the Minutes of Meetings of the               :
Directors and Shareholders and Record of Shareholders              :  
of 350 Bleecker Street Apartment Corp.                             :
                                                                   :
                    -v-                                            :
                                                                   :
350 BLEECKR STREET APARTMENT CORP.,                                :
                                                                   :
                              Respondent.                          :
                                                                   :
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	The following papers, numbered 1 to ___ were read on this motion to/for to / for _______

| PAPERS NUMBERED

Notice of Motion/ Order to Show Cause-Affidavits-Exhibits __________________________________________

Answering Affidavits - Exhibits __________________________________________________________________

Replying Affidavits _____________________________________________________________________________



Cross-Motion: [ x ] Yes   [ ] No



     Petitioner moves, by order to show cause, for an order

pursuant to Business Corporation Law ("BCL") § 624 and/or the

common law directing respondent 350 Bleecker Street Apartment

Corp. ("the Coop") to permit petitioner to examine and copy

complete and unredacted minutes of the Coop's Board of Director

meetings and shareholder meetings, and the record of the names


                               -1-



and addresses of all shareholders of the Coop. The Coop opposes

the application and cross moves for an order dismissing it and

granting sanctions.

     Petitioner was the sponsor of the conversion of the Coop and

continues to hold 23.47% of the Coop's shares. Before the

instant dispute arose, the parties herein were involved in a

federal court litigation in which petitioner sued the Coop after

the Coop's termination of its garage lease ("the Garage 

litigation").  The District Court for the Southern District of

New York granted summary judgment in petitioner's favor,

And awarded petitioner attorney's fees. The Coop has appealed the

decision granting summary judgment to petitioner to the Court of

Appeals for the Second Circuit.

     On October 9, 2001, a few days after the District Court's 

decision granting summary judgment in petitioner's favor,

petitioner requested the Coop's minutes for the previous 12

months and a list of shareholders, including those not residing

in the building. It appears from the parties' submissions that

the Coop was willing to provide the shareholder list and minutes.

However, with respect to the Board minutes, the Coop took the

position that petitioner would only be permitted to view a

redacted version of the minutes so that discussions relating to

the Garage litigation could be redacted. As a result, petitioner

brought this proceeding.


                               -2-



     There is no dispute that petitioner is entitled to the

shareholder minutes and list pursuant to Business Corporation Law

§ 624 (b), and this aspect of the petition is granted.

     In contrast, the issue of whether petitioner may be

permitted to review the Board minutes is governed by the common

law under which a shareholder's request for Board minutes may be

refused upon a showing of improper purpose or bad faith on the

part of the shareholder. See, Matter of Crane Co. v Anaconda Co.,

39-NY2d 14 (1976).

     Petitioner asserts that it requires the minutes so as (i) to

file a proposed amendment to the offering plan with the State

Attorney General, (ii) to report to shareholders the Board's

asserted misrepresentations and omissions regarding Kenneth B.

Newman ("Newman"), a partner of petitioner, and (iii) to

determine whether the Board has breached its fiduciary duty to it

and the other shareholders by pursuing frivolous litigation and

wasting the Coop's assets.

     The Coop counters that petitioner seeks the minutes for the

improper purpose of gaining an unfair advantage as the Board

minutes reflect the Coop's strategy in the Garage litigation and

the Coop's impending action against Newman for his alleged

failure, as managing agent, to properly bill himself as a

commercial tenant.

     While petitioner is generally entitled under the common law


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to review the Board minutes, it should not be permitted to misuse

this right to advance its litigation position in disputes between

it (or Newman) and the Coop. On the other hand, in view of the

ongoing conflict between the parties, the Coop should not be

allowed to unilaterally determine which parts of the Board

minutes should be redacted.  Instead, the minutes should be

reviewed and redacted either by a referee designated by the

parties or a referee appointed by the court.

     In view of the above, it is

     ORDERED that within thirty days of service on the Coop of a

copy of this decision and order with notice of entry, the Coop

shall (i) permit petitioner's representative(s) to examine and

make extracts from the list of shareholder's of record (including

those not residing in the Coop) and shareholder minutes from

October 2000 to the present, or (ii) provide this information to petitioner

electronically, if such information is maintained by the Coop in such a

format; and it is further

     ORDERED that the issue of whether certain parts of the Board

minutes would reveal the Coop's strategy in the Garage litigation

and/or the impending litigation against Newman and thus should be

redacted shall be referred to a Special Referee to hear and

report with recommendations, except that, in the event of and

upon the filing of a stipulation of the parties, as permitted by

CPLR 4317 the Special Referee, or another person designated by


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the parties to serve as referee, shall hear and determine the

aforesaid issue; and it is further

     ORDERED that this motion is held in abeyance pending receipt

of the report and recommendations of the Special Referee and a

motion pursuant to CPLR 4403 or receipt of the determination of

the Special Referee or designated referee; and it is further

     ORDERED that a copy of this order with notice of entry shall

be served on the Clerk of the Judicial Support Office (Room 311)

to arrange a date for the reference to a Special Referee; and it

is further

     ORDERED that the cross motion is denied.


DATED: June 19, 2002

                                            /s/ Joan A. Madden
                                                 J.S.C