N.Y. Banking Law § 6029: Liability of stockholders for wages due to laborers, servants or employees

§ 6029. Liability of stockholders for wages due to laborers, servants

or employees. 1. The ten largest stockholders, as determined by the fair

value of their beneficial interest as of the beginning of the period on

which the unpaid services referred to in this section are performed, of

every investment company, the shares of which are not listed on a

national securities exchange or regularly quoted in an over-the-counter

market by one or more members of a national or an affiliated securities

association, shall jointly and severally be personally liable for all

debts, wages or salaries due and owing to any of its laborers, servants

or employees other than contractors, for services performed by them for

such investment company. Before such laborer, servant or employee shall

charge such stockholder for such services, he shall give notice in

writing to such stockholder that he intends to hold him liable under

this section. Such notice shall be given within ninety days after

termination of such services, except that if, within such period, the

laborer, servant or employee demands an examination of the record of

stockholders under subdivision two of section six thousand twenty-three,

such notice may be given within sixty days after he has been given the

opportunity to examine the record of stockholders. An action to enforce

such liability shall be commenced within ninety days after the return of

an execution unsatisfied against the investment company upon a judgment

recovered against it for such services.

2. For the purposes of this section, wages or salaries shall mean all

compensation and benefits payable by an employer to or for the account

of the employee for personal services rendered by such employee. These

shall specifically include but not be limited to salaries, overtime,

vacation, holiday and severance pay; employer contributions to or

payments of insurance or welfare benefits; employer contributions to

pension or annuity funds; and any other moneys properly due or payable

for services rendered by such employee.

3. A stockholder who has paid more than his pro rata share under this

section shall be entitled to contribution pro rata from the other

stockholders liable under this section with respect to the excess so

paid, over and above his pro rata share, and may sue them jointly or

severally or any number of them to recover the amount due from them.

Such recovery may be had in a separate action. As used in this

subdivision, "pro rata" means in proportion to beneficial share

interest. Before a stockholder may claim contribution from other

stockholders under this subdivision, he shall, unless they have been

given notice by a laborer, servant or employee under subdivision one,

give them notice in writing that he intends to hold them so liable to

him. Such notice shall be given by him within twenty days after the date

that notice was given to him by a laborer, servant or employee under

subdivision one.