After both sides rested in this commercial landlord-tenant holdover proceeding, the matter was adjourned for closing arguments. In this interim period, between the parties resting and closing statements, Petitioner corporation was dissolved by proclamation of the Secretary of State pursuant to the New York Tax Law. During summation, Respondent orally moved to dismiss this action based on Respondent's standing to maintain this suit as a dissolved corporation; this motion was later repeated in writing, in which Respondent requested the alternative relief of staying the action until such time as Petition can prove that it is no longer a dissolved corporation under the laws of the State of New York.

Both relief requested by Respondent are hereby denied.

It is undisputed that Petitioner was dissolved by proclamation pursuant to Tax Law sec. 203-a, subd. 10, for its failure to pay its franchise taxes. 172 East 122 Street Tenants Ass'n. v Schwartz, 73 NY2d 340, 540 N.Y.S. 2d 420 (1989). Corporations so dissolved are subject to the provisions of section 1006 of the Business Corporation Law, Corporate Action and Survival of Remedies After Dissolution. Even after dissolution, corporations continue to have a de jure existence for the purposes of winding up their affairs, inclusive of any suites brought or defended. Bowditch v. 57 Laight Street Corporation, 111 Misc 2d 255, 443 N.Y.S. 2d 785 (New York County 1981).

Section 1006(a) of the BCL states, in pertinent part:

(4) The corporation may sue or be sued in all courts and participate in

actions and proceedings, whether judicial, administrative, arbitrative

or otherwise, in its corporate name, and process may be served by or

upon it.

Section 1006(b) of the BCL further states: [*2]

The dissolution of a corporation shall not affect any remedy available to

or against such corporation, its directors, officers or shareholders for

any right or claim existing or any liability incurred before such dissolution,

except as provided in section 1007 (Notice to creditors; filing or barring

claims) or 1008 (Jurisdiction of supreme court to supervise dissolution

and liquidation).

Pursuant to this statute, Petitioner is specifically authorized to proceed with this litigation, even though it failed to pay its franchise tax and was dissolved by the Secretary of State after this lawsuit was commenced. Cassetta Frank, Inc. v. P.G.C. Associates et al., 264 AD2d 375, 694 N.Y.S. 2d 102 (2d Dept. 1999). Any claims arising after dissolution, but based on contracts or events prior to dissolution, are enforceable. Expromotion, Ltd. v. Heideprien-Santandrea, Inc., 101 Misc 2d 593, 421 N.Y.S. 2d 520 (New York County 1979). Its failure to pay its franchise taxes did not affect Petitioner's right to collect and distribute its assets or to sue in its corporate name. Vinlis Construction Co., Inc. v. Roreck, 67 Misc 2d 942, 325 N.Y.S.2d 457 (Nassau County 1971) [the corporate plaintiff was dissolved by proclamation for failure to pay taxes during the pending action, but the court held that the dissolution did not affect the plaintiff's capacity to maintain the action].

Any corporation, once it has been dissolved, is required to liquidate its assets and wind up its affairs. This process of winding up corporate affairs includes the ascertainment of the amount of a debt or demand by agreement or by legal proceedings. Ballentine's Law Dictionary Lexis Law Publishing (1969). This is even more appropriate in situations such as the case at bar in which the dissolved corporate entity may pay its delinquent taxes during the pendency of the lawsuit and be reinstated to its corporate powers by such payment nunc pro tunc. Tax L. Sec. 203-a, subd. 7.

Based on the foregoing, the court concludes that Petitioner's dissolved status under these circumstances has no effect on the continuation of these proceedings.

This is the order and decision of the court.

Dated: April 26, 2005

__________________________

EILEEN N. NADELSON, J.C.C.