Klaw v. Erlanger

Prior to 1918 plaintiff and defendant Erlanger had been copartners. In that year the partnership was dissolved. Prior thereto the firm were lessees of the Gaiety Theatre. By the lease the landlord had an option to cancel upon a sale of the property. Klaw and Erlanger formed defendant corporation, with nominal capital, to hold the lease which was renewed to defendant corporation, the individuals guaranteeing performance. Each owned one-half of the stock, each was an officer and director and there were two additional dummy directors. The landlord was a corporation. The owners of the stock died…