Greene v. Boardman

This is an action by a bankruptcy trustee of the Smith-Kinney Co., Inc., against the directors pursuant to section 58 of the Stock Corporation Law. The plaintiff claims that in the spring of 1928 the defendants as directors authorized and consented to the retirement of preferred stock and the declaration of dividends in the total sum of $14,940, at a time when there was no surplus out of which said payments could be made.

The defendants have alleged as a first defense that all creditors at the time of the illegal acts have been paid in full; that all of the stock of the corporation is now…