First Department Clarifies Circumstances Under Which Acknowledgment of a Debt Will Toll Limitations Period for Action to Recover on a Promissory Note
In Hawk Mountain LLC v. RAM Capital Group LLC, the First Department held that, under New York General Obligations Law (“G.O.L.”) § 17-101, an acknowledgment of a debt tolled the limitations period for an action to recover a debt owed on a promissory note, even though the acknowledgment did not specifically mention the note at issue or the precise amount due on the note. This decision clarifies that “there is no requirement that an acknowledgement of a debt pursuant to [G.O.L.] § 17–101 leave no room for doubt as to the nature and quantum of the debt to be acknowledged.”
Commercial Division Holds Corporate Directors May Be Individually Liable When Informally Dissolved Company Forgoes Notice to Creditors
In Morse v. LoveLive TV US, Inc., a recent decision by Justice Robert R. Reed of the New York County Commercial Division, the Court denied a defendant’s motion to dismiss, holding that where it is impossible or futile to obtain a judgment against a defunct corporation that has defaulted on debts by “informal dissolution,” creditors can maintain an action directly against the directors of that company.