On appeal from Superior Court, Chancery Division, Essex County.
Lynch, Crane and Horn. The opinion of the court was delivered by Horn, J.A.D.
Plaintiff Nathan Borodinsky appeals from a final judgment embodying, among others, provisions for equitable distribution and support for defendant and two of the parties' three children. Said judgment followed an earlier judgment of divorce granted to defendant wife on her counterclaim charging a marital offense on the part of the husband.
Plaintiff challenges the provisions of the said judgment which (1) awarded as equitable distribution "[o]ne half of all of the issued and outstanding capital stock of Belmont Brake System, Inc., and 531 Central Corporation * * *" to defendant wife and requiring plaintiff to forthwith deliver to her stock certificates of said corporations; (2) awarded the sum of $900 monthly for the support of defendant and the support of Louis, the youngest of the three children born of the marriage, and certain additional items of support.
For the reasons later apparent, we need not relate the factual background in detail. That which is pertinent is that the parties were married in 1954. Three children were born of the marriage, whose ages in 1977 were Karen, 20; Linda, 18, and Louis, 15. The marriage of the parties apparently had been deteriorating for several years prior to the present action. Thus, in April 1971, after plaintiff allegedly beat defendant, the parties signed a separation agreement. However, the parties reconciled their differences within one week thereafter and continued to reside together, disregarding their agreement. They continued to live together until the end of December 1973, at which time plaintiff left the house. He presently lives in an apartment with another person in New York City, where he shares the living expenses.
On November 11, 1971 plaintiff formed Belmont Brake Systems, Inc. (Belmont Brake), of which he is sole stockholder, and through that corporation purchased an automobile repair business on Central Avenue in Newark.
Belmont Brake is primarily concerned with brake repairs, although since its inception it has engaged in transmission work and other types of automotive repairs. At some point in 1972 the company began to expand its operation under the trade name of Belmont Transmission Company, apparently in an attempt to attract more business. However, Belmont Transmission Company is not a separate entity and plaintiff maintains no records or employees other than those of Belmont Brake. But in 1974 Belmont Brake leased another building and tract of land at 531 Central Avenue to accommodate the expanded business.
On January 16, 1976 plaintiff purchased the land and building at 531 Central Avenue through a corporation which he apparently organized shortly before and of which he is the sole stockholder -- the 531 Central Realty Corp. Although acquired under the name of 531 Central Realty Corp., the property was devoted exclusively to the business of Belmont Brake. It is not apparent from the record what the financial arrangements between the two corporations were
-- whether or not rent or other form of payment to Belmont Brake is made by 531 Central. However, it is clear that 531 Central Realty Corp. (531 Central) owns only the building and tract of land, whereas the automobile-repair business operated on that location is operated solely by Belmont Brake.
The purchase price of 531 Central Avenue was $12,500 and was financed entirely through a $15,000 loan. To secure the loan plaintiff or 531 Central gave a mortgage on the property acquired. The record does not indicate the maturity date of the loan, the payment schedule or the present outstanding balance.
Plaintiff raises no objection to the judgment provision awarding to defendant a 50% interest in the outstanding stock of Belmont Brake. His objection is directed to the manner of disposition -- that is, in kind. He asserts that that form of disposition will inexorably lead to a deadlock and further proceedings under the New Jersey Business Corporations Act, N.J.S.A. 14A:1-1 et seq. , which will redound to the disadvantage of the parties. The spectre of dissolution, N.J.S.A. 14A:12-7, and forced liquidation, N.J.S.A. 14A:12-9, is envisioned by him, especially since he contends the corporations are in a "marginal" financial condition. This would effectively choke off the prime source of plaintiff's income. The award of one-half of the stock in 531 Central is challenged not only for the same reason as the challenge to the disposition of the Belmont Brake stock but also because plaintiff claims that the 531 Central stock is not, under the law, eligible for equitable distribution. This is discussed infra.
The trial judge arrived at the conclusion to distribute the stock in kind because "[he could not] put a value on the business" because, in his opinion, the witnesses, including accountants, could not or did not supply sufficient information so that the judge's determination as to value would constitute more than conjecture. At the same time he recognized the ...