This section contains the nature of the case and procedural background.

Realty (D) was organized in 1941 under the laws of the State of New York for the sole purpose of owning and managing a building. The tenants were Chatham, National, and Nelkin. At the time of incorporation, all the shareholders entered into an agreement to run the building at a profit and that they would decide their own rent in the building and then the officers of the corporation would decide the rent for nonshareholders. Since 1941 and until 1961 all of the parties occupied most of the space in the building at substantially reduced market rates. Nelkin left the building in 1961. In 1946, Richter sold his interest in Chatham. Both Richter and Chatham no longer derived any benefit from owning stock because neither shared in the discounted rents. In 1968, Nelkin and Richter began a campaign to convince the shareholders of Chatham and National who controlled 5/9ths of D to disregard the shareholders' agreement and pay a fair and reasonable rent, to dissolve the corporation and sell the building or to buy the minority shares at a reasonable price. In 1968, National refused to attend a special meeting called by Nelkin and Richter. It was clear at this point in time that things were irreconcilable and the majority only offered the minority what they had paid in 1941 for their shares. Chatham also announced that it was taking over more space in the building. Nelkin and Richter (P) sued for judicial dissolution. The Court granted the petition. The Appellate Division reversed and dismissed the petition.

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