By Order to Show Cause dated March 25, 2019, the Petitioners, Joseph F. Pofit and other Directors constituting a majority of the Directors of St. Clare's Corporation (hereinafter collectively referred to as the "Petitioners"), commenced this special proceeding pursuant to Section 1102(a)(1)(A) and (a)(2)(E) of the Not-For-Profit Corporation Law ("NPCL") seeking the judicial dissolution of St. Clare's Corporation (hereinafter referred to as the "Corporation"). The Petitioners allege that the Corporation should be dissolved because its assets are insufficient to discharge its liabilities and because the Corporation is no longer able to carry out its purposes.

Specifically, the Petitioners aver that the Corporation, whose sole mission was to "promote the health and well-being of the residents of the City and County of Schenectady, New York . . . in a manner consistent with the convictions and teachings of the Roman Catholic Church", was forced to suspend its operations in or around February, 2019, "due to its lack of sufficient funds to discharge debts presently due and owing" (Petition for Dissolution, at Paragraphs "4(a)" and "6"). The Petitioners represent that the Corporation has no assets; however, it has an existing obligation due and owing to the St. Clare's Hospital Retirement Income Plan, its sole creditor, in the nature of "employer contributions necessary to pay benefits to former employees of the corporation in accordance with the terms of the Plan" (Petition, at Paragraphs "7" and "9"). The Petitioners acknowledge that the "amount currently estimated to be due by the Corporation to the Plan . . . to which the Corporation has no counterclaims or offsets . . . is $53,500,000" (Petition, at Paragraphs "9" and "10"). Lastly, the Petitioners allege that the Corporation "has made every reasonable effort to secure additional operating funds but has been unsuccessful, and there is no likelihood that the required financial resources can be obtained" (Petition, at Paragraph "11").

On April 16, 2019, the initial return date of the Order to Show Cause, several parties appeared in opposition to the relief requested by the Petitioners, to wit: Karen Bradley, Kelvin Isolda and Laurie Wasniski, who are all former employees of the Corporation with vested rights in the St. Clare's Hospital Retirement Income Plan (hereinafter referred to as the "Plan"); and the Office of the Attorney General of the State of New York (hereinafter referred to as the "Attorney General"), the statutory party in interest pursuant to NPCL §1102(b).^[FN1] The Corporation and the Plan, two legal entities that are separate and distinct parties from each other and from the Petitioners, also appeared by counsel independent from the Petitioners.^[FN2] After hearing argument, the Court granted an extension of time for responsive pleadings to be filed and thereafter, for formal discovery demands to be served pursuant to the CPLR. Formal discovery is necessary because, as reported by the Attorney General, the Petitioners had been unresponsive to informal requests for financial disclosure of miscellaneous corporate records.

Issue was joined by the filing of Answers and Objections to the Petition by Karen Bradley, Kelvin Isolda, Laurie Wasniski, and the Attorney General. Responses to the Petition were also filed by the Corporation and the Plan. Subsequent to the filing of these responsive pleadings, several motions were filed that are all currently pending before the Court, to wit: 1) the Attorney General's Motion for Disclosure pursuant to CPLR §408 ("Motion No. 1"); 2) Karen Bradley's Motion to remove the Trustees of the St. Clare's Retirement Income Plan Trust and substitute the Trust beneficiaries to act as Trustees, or in the alternative, to appoint a Receiver to serve as Trustee ("Motion No. 2"); 3) the Corporation's Cross-Motion for Partial Summary [*2]Judgment dismissing Ms. Bradley, Mr. Isolda and Ms. Wasniski from this proceeding pursuant to CPLR Rules 406, 409 and 3212 ("Motion No. 3"); and 4) the Order to Show Cause dated December 10, 2019, filed jointly by the Corporation, the Plan and the Petitioners seeking to stay this proceeding pursuant to CPLR §2201 until the conclusion of the Hartshorne lawsuit, and for a protective order pursuant to CPLR §3103(a) striking the Attorney General's Notice to Admit in its entirety ("Motion No. 4"). Each of these motions are now fully submitted, and the Court has had due deliberation thereon.

In its Answer with Objections, the Attorney General objected to the Petition on the grounds that: (a) it lacks essential evidentiary information to allow the Court or the Attorney General to review the proposed dissolution; (b) that it did not provide proper notice to all creditors of the Corporation; and (c) that it is not properly venued.^[FN3] Specifically, the Attorney General alleged that the Petition is insufficient in that it provides no financial information or any evidentiary basis upon which the Court or the Attorney General can verify the claim of the Corporation's insolvency. The Attorney General further asserted that the Petition contains no proof of the Corporation's debt in the form of an accounting, an income statement, or a balance sheet calculating its total assets and liabilities, or any explanation as to the disposition or loss of its assets.

Of particular concern to the Attorney General is the lack of any accounting of the investment or use of the $28.5 million received by the Corporation from the State of New York to provide funding for the Plan and the corresponding pension benefits of 1,100 former employees of the Corporation.^[FN4] Since no financial or actuarial documentation was provided with the Petition regarding these grant monies, or any insight into the Corporation's management of the Plan either before or after its receipt of the grant, the Attorney General asserts that it is unable to assess whether the Corporation's assets were reasonably spent and whether the dissolution of the Corporation is necessary as alleged in the Petition.

In an effort to satisfy the Attorney General's request for expansive financial disclosure, the Corporation voluntarily produced to all parties copies of the Plan (As Amended and Restated Effective January 1, 2011); Amendments 1 and 2 to the Plan, executed in October, 2018 and December, 2018, respectively; the Plan Trust Agreement, executed in December, 2009; and the IRS Determination Letter, dated September 27, 2013, advising that the Plan is tax-qualified under Section 401(a) of the Internal Revenue Code. The Corporation further produced copies of its Second Amended and Restated By-Laws, adopted in July, 2009; the Corporation's IRS Form 990 for 2017; the Corporation's balance sheets for 2015 and 2016; the underlying records that the Corporation would have used had it prepared a statement of revenues and expenses for 2015 and [*3]2016; and many other documents responsive to the Attorney General's discovery demands.^[FN5]

However, despite the Corporation's production of these documents, the Attorney General was not satisfied with the financial disclosure provided and, as a result, filed a Motion pursuant to CPLR §408 ^[FN6] , seeking numerous additional documents which are itemized in the Motion. A request has also been made for the examinations before trial of the Petitioner, Joseph Pofit, who is the President/Chairman of the Corporation's Board of Directors; and the Corporation's attorney, Raymond McCabe, Esq. The Attorney General based its Motion on the documents that had been produced voluntarily which prompted several questions about the Corporation's activities prior to this proceeding including: the Corporation's management of the Plan; what happened to the $28.5 million in public funds paid out for the specific purpose of funding the Plan; why the Corporation terminated the Plan in November, 2018; why the Plan failed to pay the projected pension benefits thereunder, leaving the participants with either reduced benefits or no benefits; and what if any remedies exist for such failure.

Since the filing of this Motion, Counsel have engaged in several meet-and-confers which resulted in the Corporation's agreement to produce certain additional documents. However, a dispute remains regarding the Attorney General's requests for depositions and a few remaining documents that are identified in the Attorney General's Reply Memorandum of Law in Support of the Motion, at pages 6-7.^[FN7]

In opposition to the Motion, the Petitioners argue that discovery is not necessary in this limited proceeding because it was brought pursuant to Article 11 of the NPCL seeking a judicial dissolution, not Article 10 of the NPCL seeking a non-judicial dissolution and therefore, the disclosure requirements of Article 10 do not apply. Furthermore, the Petitioners contend that, assuming the Attorney General is entitled to disclosure, the scope of the discovery sought by the Attorney General goes far beyond that which is required even in an Article 10 proceeding. The Petitioners also object to any discovery that pertains to the Plan since the Plan is a separate entity from the Corporation and is not the subject of this proceeding. The Petitioners argue that the Attorney General may only obtain discovery and investigate the termination of the Plan if they file a separate proceeding pursuant to its general authority under the Executive Law. In sum, the Petitioners are only willing to produce six years of financial statements beyond what has already been produced. They ask the Court to exercise its discretion and limit the discovery in this proceeding to that which has been agreed to and already produced. Based, in part, on the sheer volume of litigation that has already occurred herein, it is abundantly clear that this proceeding is not a typical, garden variety judicial dissolution. For these reasons, and as outlined below, additional disclosure is necessary.

It is also clear based on the Court's reading of Article 11 of the NPCL, that certain [*4]provisions contained in Article 10 of the NPCL also apply to proceedings brought under Article 11. NPCL §1115, entitled "Applicability of other provisions", provides in pertinent part as follows:

(a) Subject to the provisions of this article, the provisions of sections 1006 (Corporate action and survival of remedies after dissolution), 1007 (Notice to creditors; filing or barring claims) and 1008 (Jurisdiction of supreme court to supervise dissolution and liquidation) shall apply to a corporation dissolved under this article.

(b) Any orders provided for in section 1008, may be made at any stage of an action or special proceeding for dissolution of a corporation under this article, . . .

(c) Notice to creditors and claimants, provided for in section 1007, may also be given, by order of the court, at any stage of an action or special proceeding for dissolution of a corporation under this article. [Emphasis added].

Thus, NPCL §1008, which gives the Court wide discretion to supervise the dissolution of a corporation and "make all such orders as it may deem proper in all matters in connection with the dissolution", applies to this Article 11 proceeding. See, NPCL §1008(a). See also, Alco Gravure v. Knapp Found., 64 NY2d 458, 469; Matter of Friends for Long Island's Heritage, 80 AD3d 223, 232. Accordingly, this Court has the power and discretion to make any orders it deems appropriate at any stage of this proceeding.

Ultimately the Court must decide, after careful consideration of the material and relevant facts as determined at a hearing, whether the proposed dissolution of the Corporation is beneficial to its members. See, NPCL §1107 and §1109(b)(2). In order for the Court to reach an ultimate conclusion based on the facts and render a fair and just decision, the Attorney General, who is a necessary party herein, must be given the opportunity to fully investigate the activities of the Corporation. In particular, the Attorney General must have the chance to review the use and disposition of the $28.5 million paid from State coffers to assure the payment of pension benefits under the Plan, which was purportedly woefully inadequate. In addition to investigating the facts underlying a proposed dissolution, the Attorney General has a statutory obligation to protect the interests of the public by overseeing the use of charitable assets by not-for-profit corporations pursuant to NPCL §112. At this procedural point and based upon the questions raised by the documents provided thus far, the outstanding discovery requests appear to not only fulfill this statutory obligation, but are also designed to establish a complete record of the pertinent facts in this matter.

For similar reasons, the Court is not persuaded by the Petitioners' argument that the Plan, being an entity separate and apart from the Corporation, is not the subject of this proceeding and therefore not required to produce any of its financial records herein. The Petitioners have insisted since the outset of these proceedings that this is a routine matter limited to the sparse allegations in the Petition and that the Court need only be concerned with the singular issue of whether the Corporation's liabilities exceed its assets. The Petitioners ask the Court to take their allegations at face value and to blindly accept their representation that in January, 2019, just prior to the filing of the Petition, the Corporation deposited the balance of its remaining assets with the Plan, which is now insolvent, thus ending the inquiry. The Court does not share the Petitioners' point of view. Although this Court is not being asked at this procedural juncture to evaluate the Trustees' handling of the Plan, the great lengths to which the Petitioners have gone to avoid turning over the documents regarding the Plan leave the inescapable impression that the documents may contain material that would subject the Petitioners to not only criticism, but possible liability. In fact, the Petitioners' objections give the appearance of a veiled attempt to evade a fair and full inquiry into the investment, management and use of the Corporation's assets, including the above-referenced $28.5 million public grant.

Although the Petitioners argue otherwise, the Plan is a party to this proceeding. It has retained its own counsel and has appeared herein. It is the Plan that possesses the material and relevant information regarding the use and disposition of the Corporation's assets. Therefore, the [*5]Attorney General is entitled to the discovery it seeks regarding the financial records of the Plan and in the interests of judicial economy, should not be forced to commence yet another proceeding. By permitting the CPLR discovery requested by the Attorney General, a complete factual record can be made and will provide the necessary evidentiary basis for the Court to verify the allegations of the Petition before discharging the Corporation's liabilities and deciding whether to grant dissolution, or alternatively, for the Court to fashion some other appropriate remedy available by law. Simply put, granting the Attorney General's requests for further disclosure is the only way that all can be assured that the funds were properly allocated and managed, which is in all parties' best interest, legally and otherwise.

Accordingly, the Attorney General's Motion for the pretrial disclosure that remains outstanding is granted. The Petitioners and/or the Corporation and/or the Plan are directed to produce the requested documents as identified above, within thirty (30) days of the date of this Decision and Order. Further, the depositions of Mr. Pofit and Mr. McCabe shall be scheduled and conducted within ninety (90) days of the date of this Decision and Order.^[FN8]

Lastly, the Court had previously adjourned without date the deadlines for any further responsive pleadings to be served, namely, the Petitioners' Reply to the Answers and Objections of the Attorney General, Ms. Bradley, Mr. Isolda and Ms. Wasniski and any Sur-Replys thereto. In the event the parties have not already served such responsive pleadings, the Petitioners' Reply to the Answers and Objections must be served and filed within twenty (20) days of the date of this Decision and Order. Sur-Replys, if any, must be served and filed within thirty (30) days of the date of this Decision and Order.

The next Motion filed was Ms. Bradley's Motion to remove the Trustees of the St. Clare's Retirement Income Plan Trust (hereinafter referred to as the "Trust"), and substitute the Trust beneficiaries to act as Trustees, or in the alternative, to appoint a Receiver to serve as Trustee. This Motion is supported in part by the Affidavits of twenty eight (28) additional beneficiaries of the Trust and primarily seeks to direct the litigation in this matter on behalf of the Trust. The Attorney General, as well as Mr. Isolda and Ms. Wasniski, have filed papers in support of the Motion. The Petitioners and the Corporation have opposed the Motion, and the Corporation has cross-moved for partial summary judgment dismissing Ms. Bradley, Mr. Isolda and Ms. Wasniski from this proceeding for lack of standing.

By way of background, in mid-2008, after the Corporation ceased operating as a hospital, it transferred its assets to Ellis Hospital. As part of this "merger" dictated by the Berger Commission, the Corporation received monies the State believed were necessary to wrap up its operations as a hospital which included $28.5 million to buttress the Corporation's obligations to the hospital's pensioners. Subsequent thereto, in December, 2009, the Directors of the Corporation established the Trust which was designed solely to oversee the administration of the Plan. Pursuant to the Trust Agreement, the Directors of the Corporation appointed themselves, with the exception of the Roman Catholic Bishop of the Diocese of Albany, to serve as the Trustees of this new Trust (see, Section 4.1 of the Trust Agreement). The Trustees were given the power to hold, manage and invest the Trust corpus exclusively for the retirement income benefits of the Plan participants and were required to make payments or disbursements of such benefits pursuant to the terms of the Plan (see, Sections 2.2, 2.3, 7.1 and Articles 5 and 6 of the Trust Agreement). In addition, they were required to keep accurate and detailed records and complete accounts of all investments, receipts, disbursements and all other transactions with respect to the Trust (see, Sections 4.7 and 6.4 of the Trust Agreement).

The Corporation on behalf of the Trust, and through its Board of Directors, provided regular updates to the Plan participants regarding the Plan's assets held by the Trust. For instance, in December, 2015, the Corporation sent a notice to the Plan participants that "as of December 31, 2014, the value of the Plan's assets was $36,945,393.00; however, the Plan's obligation to pay benefits exceeded the value of the Plan's assets by $32,824,838.00" (see, Exhibit "D" annexed to Attorney Esposito's Memorandum of Law, dated April 29, 2019). In July, 2017, a notice was sent that "as of December 31, 2016, the value of the Plan's assets was $33,179,648.00, and that the Plan's obligation to pay benefits exceeded the value of the Plan's assets by $35,521,379.00" (Id., at Exhibit "F"). Then in October, 2018, the Corporation notified the Plan participants that the Plan was being "terminated, effective November 1, 2018", and that their benefits would either be "reduced or eliminated beginning in February, 2019", depending on the age of each participant (Id., at Exhibit "E"). In this notice, the Corporation acknowledged that in 2016 and 2017, it had previously advised the Plan participants that "the assets of the Plan will be exhausted between 2024 and 2028 and that the Plan would not be able to pay benefits at that point" (Id.) However, in 2018, well before this eight (8) to twelve (12) year projection, the Corporation decided that, having "no source of income . . . it would "soon be forced to dissolve, leaving the Plan without an administrator and sponsor", thus the need for the Plan's termination. (Id.)

Notably, pursuant to the terms of the Trust Agreement, the Trustees' powers and obligations thereunder shall continue until the Trust is terminated and the entirety of the Trust assets are fully distributed (see, Sections 5.4, 8.2 and 8.3 of the Trust Agreement). Although it is clear that the Corporation terminated the Plan in November, 2018, it is unclear whether the entire Trust has been fully distributed. The Affidavits of Mr. Isolda and Ms. Wasniski, submitted as part of their Answers and Objections to the Petition, suggest that the Trust has not been fully distributed and that they are continuing to receive pension benefits from the Trust, albeit in a reduced amount.

Ms. Bradley, Mr. Isolda and Ms. Wasniski have appeared in this proceeding because they, as the beneficiaries of the Trust, along with all the other Plan participants, are adversely affected by the termination of the Plan. They believe that their rights are not being properly protected herein because the Trustees, who have a fiduciary duty to act in the best interests of the Trust beneficiaries, have an inherent conflict of interest by virtue of the fact that they are also the Petitioners, who as the Directors of the Corporation, terminated the Plan to the detriment of the Trust beneficiaries.

This conflict of interest also forms the basis for Ms. Bradley's Motion to have the Trustees removed and a receiver appointed. Ms. Bradley argues that the Trustees, who have a fiduciary obligation to the creditor Trust, simultaneously have a conflicting fiduciary obligation to the debtor Corporation as its Directors. She contends that the Trustees cannot adequately protect her interests and that of the other Trust beneficiaries since that would require the Trustees to oppose the same relief that they, as Petitioners, are requesting. Similarly, and presumably for the same reasons, the Plan, appearing herein as a Respondent, is not actively pursuing the recovery of the $53.5 million debt admittedly owed to it either through a judgment against the Corporation or through potential third party claims.^[FN9] Thus, the pensioners appearing herein believe that they are better suited to protect their interests and that, as the parties who clearly have a tangible stake in the outcome of this proceeding, they have standing to appear herein and should be substituted in place of the Trustees. In the alternative, they ask the Court to appoint a receiver to protect their monetary interests.

In opposition to this Motion and in support of the Corporation's Cross-Motion, the Petitioners and the Corporation contend that none of the individual Plan participants/Trust beneficiaries, including the three (3) individuals who have appeared herein, have standing in this proceeding because neither the Plan nor the Trust, which are separate and distinct legal entities, are the subject of this proceeding. They argue that only the Corporation is the subject of this proceeding. They submit that the Plan participants are not members, creditors or claimants of the Corporation because the Corporation has no members and has only one creditor, the Plan. Similar to what they argued in opposition to the Attorney General's Motion for pretrial disclosure, the Petitioners and the Corporation insist that the Court need only decide whether the Corporation's debts exceed its assets and whether it should be dissolved. Further, since the Trust assets were required to be held separate and apart from the Corporation's assets pursuant to the Trust Agreement, they argue that any inquiry into the management of the Plan and/or the Trust and any claims with respect thereto are beyond the limited scope of this proceeding.

The Court agrees that the Corporation, the Plan and the Trust are separate legal entities that are technically distinct from each other. However, the Court does not agree that the Plan and the Trust are beyond the reach of the Court's jurisdiction. The Trust and the Plan were created by the Corporation, in essence and reality controlled by the Corporation and ultimately funded with the Corporation's assets. Therefore, the documents memorializing the Trust's and the Plan's financial activities are indeed relevant to this proceeding. As determined above, the Court's inquiry does not stop with the Corporation's representation that it has no assets because it transferred its remaining assets to the Plan. The Court has wide discretion to hear and decide all matters it deems relevant to the Corporation's proposed dissolution and may retain jurisdiction for the purpose of supervising the liquidation and winding up the affairs of the Corporation. See, NPCL §§1115 and 1008.

Specifically, pursuant to NPCL §1008(a) and as relevant herein, the Court has the authority and discretion to consider such matters as:

(5) The determination and enforcement of the liability of any director [or] officer . . . for the liabilities of the corporation.

(6) The presentation and filing of intermediate and final accounts of the directors, the hearing thereon, the allowance or disallowance thereof, and the discharge of the directors, or any of them, from their liabilities.

(7) The administration of any trust, or the disposition of any property held in trust by or for the corporation.

***

(9) The payment, satisfaction or compromise of claims against the corporation, the retention of assets for such purpose, and the determination of the adequacy of provisions made for payment of the liabilities of the corporation.

***

(11) The appointment and removal of a receiver under article 12 (Receivership) who may be a director, officer or member of the corporation. [Emphasis added].

Accordingly, the Court has the power to review the administration of the Trust by the Petitioners, in their role as Trustees, within the context of this dissolution proceeding.

Next, in determining whether the Trust beneficiaries have standing to participate in this proceeding, the Court begins its analysis with the general rule as enunciated by the Court of Appeals in Alco Gravure v. Knapp Found., supra. Alco Gravure was a declaratory judgment action brought by corporate plaintiffs pursuant to the Not-For-Profit Corporation Law, whose employees were the intended beneficiaries of a charitable foundation. The defendant moved to dismiss the complaint, challenging the plaintiffs' standing to maintain the action.

While the nature and procedural posture of the Alco Gravure case differ from this case, the plaintiffs in Alco Gravure, like the Trust beneficiaries here, were members of a named class of beneficiaries, namely, persons employed by the defendant corporation. In finding that the plaintiffs had standing to sue, the Alco Gravure Court held as follows:

The general rule is that one who is merely a possible beneficiary of a charitable trust, or a member of a class of possible beneficiaries, is not entitled to sue for enforcement of the trust. . . Instead, the Attorney-General has the statutory power and duty to represent the beneficiaries of any disposition for charitable purposes.

There is an exception to the general rule, however, when a particular group of people has a special interest in funds held for a charitable purpose, as when they are entitled to a preference in the distribution of such funds and the class of potential beneficiaries is sharply defined and limited in number. [Internal citations omitted] [Emphasis added].

Alco Gravure, supra, at 465. Since the Trust beneficiaries are "sharply defined and limited in number" with a "special interest" in the Trust funds, they fall under the exception to the general rule carved out by the Alco Gravure Court and thus have standing to appear in this proceeding. See also, Matter of Trustco Bank, 33 Misc 3d 745, 751.

By way of further illustrating the standing of the Trust beneficiaries to participate in this proceeding, one might compare the relationship of the parties in this proceeding to the parties in an estate accounting proceeding where the executor is also the trustee of a residuary testamentary or inter vivos trust. In such an accounting proceeding, the executor is charged with accounting for his or her actions to the residuary beneficiary, the trust. However, since the executor is also the trustee and since one cannot account to oneself or discharge or release oneself from liability, all of the beneficiaries of the trust become interested parties who are entitled to notice of the accounting and may object to the accounting. See, Surrogate's Court Procedure Act §2210(10). Their right to object may become even more pronounced if they were expecting a large inheritance, but the executor's accounting shows that the debts of the estate far exceed its assets, leaving nothing to pour over into the trust. In this scenario, the trust beneficiaries have a tangible stake in the outcome and would have standing to participate in the accounting proceeding.

Similarly here, the Petitioners, as the Directors of the Corporation, are charged with accounting for their actions to the Corporation's sole creditor, the Plan, whose funding agent is the Trust. The Petitioners are also the Trustees and therefore cannot account to themselves or discharge themselves from all liability. Certainly, the Trustees are not going to file objections or claims against themselves as the Petitioners. Thus, the Plan participants who have a beneficial ownership interest in the Trust and are not receiving their expected pension benefits under the Plan, become interested parties and should be given, at the very least, a voice in this proceeding to protect that interest.

There is no question that the Corporation is liable to the Plan and by extension the Trust, for a shortfall of $53.5 million to fully fund the pension benefits owed to its former employees. The Corporation has admitted to its liability for this debt. The question is how the Corporation amassed this debt. For obvious reasons as outlined above, the Plan and the Trust are not asking this question. Rather, it is the Corporation's former employees, the injured parties whose pension benefits are terminated or reduced, who are making inquiry and asking for relief. The Petitioners and the Corporation are trying to prevent them from obtaining further information with respect to the details of the Plan's demise by removing them from this proceeding with their specious argument that the Plan participants only have a claim against the Plan, not the Corporation. This result would leave the Corporation's employees without any rights or remedies in this proceeding. The Court flatly rejects this argument.

The Plan is not the sole creditor of the Corporation. The Plan has been terminated. Therefore, the Plan participants, who are the true claimants or creditors of the Corporation, stand in its shoes. Logic dictates that they are the true parties in interest who have a legally cognizable stake in whether the Corporation is allowed to dissolve and discharge this $53.5 million debt that is ultimately owed to them. Accordingly, the Corporation's Cross-Motion for Partial Summary Judgment dismissing Ms. Bradley, Mr. Isolda and Ms. Wasniski from this proceeding for lack of standing is denied.

With respect to Ms. Bradley's Motion, the Court does not see the need to remove the Trustees or appoint a receiver for the following reasons: First, as stated earlier, given the termination of the Plan, it is unclear whether there are any assets remaining in the Trust to administer. Since the Corporation is no longer making any contributions to the Trust, there is nothing to receive. There is nothing for the Trustees to do, or for a receiver to do if appointed, except pay whatever benefits are left, if any.

Second, now that Ms. Bradley and the other Plan participants have been found to have standing in this proceeding, they may actively participate herein and direct the litigation as it pertains to them.^[FN10] They do not need the Trustees or a receiver to appear for them and represent their interests herein.

Third, if the Court were to appoint a receiver, the question becomes how the receiver would be compensated. The Court would certainly like to avoid this expense which would quite possibly be ultimately borne by the Plan participants themselves.

Thus, despite the conflicts of interest raised in the motion papers, and the Court's authority to appoint a receiver pursuant to NPCL §1008(a)(11), the removal of the Trustees and the appointment of a receiver is not warranted. Accordingly, Ms. Bradley's Motion requesting such relief is denied.

Lastly, the Court will address the Order to Show Cause filed jointly by the Corporation, the Plan and the Petitioners seeking to stay this proceeding pursuant to CPLR §2201 until the conclusion of the Hartshorne lawsuit, and for a protective order pursuant to CPLR §3103(a) striking the Attorney General's Notice to Admit in its entirety. In connection with their request for a protective order, the movants also request that the Attorney General be prohibited from disclosing any documents that have already been voluntarily provided by the Corporation, given its expectation that the documents would be kept confidential to the extent they are not otherwise publicly available.

The Attorney General's Notice to Admit contains 102 separate paragraphs. The Court has encouraged counsel on several occasions to meet and confer in an effort to resolve the Notice to Admit and in fact, held a conference in an attempt to resolve the dispute. However, despite these efforts, counsel have not been able to resolve their differences regarding the scope of the Notice.

The movants argue that the Notice to Admit is unduly burdensome, untimely, and seeks admissions regarding issues that are largely irrelevant to this proceeding. Specifically, the movants object to the Notice to Admit based on how lengthy it is and the fact that many of the requests for admissions pertain to the Plan and not the Corporation.

For all of the same reasons that the Court granted the Attorney General's Motion for pretrial disclosure as set forth at length above, the Court will not strike the Notice to Admit. While it may contain a large number of requests, the Court does not find the requests to be unduly burdensome or overly broad. Pursuant to CPLR §3123(a), a Notice to Admit is simply a "written request for admission . . . of the genuineness of any papers or documents, or the correctness or fairness of representation of any photographs . . . or of the truth of any matters of fact set forth in the request". "The underlying purpose of a notice to admit is to eliminate from dispute those matters about which there can be no controversy; it is not to be used to request admission of material issues or ultimate issues or facts". Howlan v. Rosol, 139 AD2d 799, 802, citing, Taylor v. Blair, 116 AD2d 204, 206. Further, it is within the Court's power and discretion to review and consider the propriety of the notice to admit. Id., at 801-802, citing, Marguess v. City of New York, 30 AD2d 782, aff'd, 28 NY2d 527.

Having thoroughly reviewed the Attorney General's Notice to Admit, it is clear to the Court that the Notice is being used solely for the purpose of disposing of uncontroverted [*6]questions of fact and is not seeking admissions regarding the ultimate issues in this proceeding. Since the Notice simply requests admissions regarding facts for which there can be no legitimate dispute, it fits squarely within the scope of CPLR §3123(a). Certainly, the Corporation should be able to comply with these proper requests. In fact, counsel for the Corporation invited the Attorney General to serve a Notice to Admit upon the Corporation, as opposed to the Plan, if the Attorney General wanted the Corporation to authenticate any documents (see, Attorney Ryan's Affirmation in Opposition to the Attorney General's Motion for Disclosure, at paragraph "25").

Nor has the Corporation provided any legal basis to prohibit the Attorney General, a public office, from disclosing any documents that have previously been produced or will be produced. Accordingly, the request for a protective order is denied. The Petitioners and/or the Corporation and/or the Plan are directed to respond to the Notice to Admit in accordance with CPLR §3123(a), within thirty (30) days of the date of this Decision and Order. Any admissions that are made shall be given the effect as proscribed by CPLR §3123(b).

With respect to the request for a stay of this proceeding until the conclusion of the Hartshorne lawsuit, the movants provide no basis for this Court to grant a stay other than the fact that the allegations in that lawsuit are substantially similar to the concerns raised by the Attorney General in this proceeding. Pursuant to CPLR §2201, the Court has the authority and discretion to grant a stay "in a proper case, upon such terms as may be just." This is not a proper case to grant a stay. There is no reason to delay this proceeding until the conclusion of the Hartshorne case. Accordingly, the request to stay this proceeding is denied. However, since the Hartshorne case has been assigned to this Court, these matters should perhaps be joined for the purposes of discovery and/or trial pursuant to CPLR §602(a) so as to avoid the potentiality for duplicative litigation and/or the possibility of inconsistent judgments.

Based on all of the foregoing, Motion No. 1 is hereby granted and Motions No. 2, No. 3 and No. 4 are hereby denied. Counsel shall advise the Court when all discovery, including depositions, has been completed, at which time the Court will schedule a Pretrial Conference to set a trial date.

The parties' remaining arguments, to the extent not specifically addressed herein, have been considered and found to be unavailing.

The foregoing shall constitute the Decision and Order of this Court.