Federal Deposit Insurance Corp. v. Commissioner of Taxation & Finance, 83 N.Y.2d 41 (1994)

A contract requiring shareholder approval is not binding and enforceable for the purposes of a real property gains tax exemption until that approval is obtained.

Summary

This case concerns whether a merger agreement, contingent on shareholder approval, constituted a binding contract before the approval was secured, thus qualifying it for a real property gains tax exemption. The Court of Appeals affirmed the Tax Appeals Tribunal’s decision, holding that because the merger was expressly conditioned on shareholder approval, no binding contract existed until that approval was obtained. Therefore, the exemption under Tax Law § 1443 (6), which applied to written contracts entered into before a specific date, did not apply.

Facts

United National Corporation (UNC) owned significant real property across 11 states. Buffalo Savings Bank (later Goldome), decided to acquire UNC’s business. On January 21, 1983, they executed an