There are countless New York corporations in which the owners are equal 50 / 50 shareholders and co-members of a two-member board. Where one sues the other for judicial dissolution, and the ground for dissolution is “deadlock” and/or “internal dissention”  under Section 1104 of the Business Corporation Law (the “BCL”), does the “resignation” of one director end the impasse, requiring denial or dismissal of the…

Not for the first time (see here, here, and here ), I find myself intrigued by the federal courts’ resistance to hearing state law claims for judicial dissolution of business entities where subject matter jurisdiction otherwise exists based on diversity of citizenship. The doctrinal device employed by federal courts to dismiss dissolution claims (without prejudice to re-filing in state court) is called Burford abstention based on a 1943 Supreme Court case of that name. The doctrine holds that a federal court sitting in diversity jurisdiction…