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This entry was published on 2014-09-22
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SECTION 394
Lost or destroyed certificate of stock
General Business (GBS) CHAPTER 20, ARTICLE 26
§ 394. Lost or destroyed certificate of stock. 1. The owner of shares
represented by a lost or destroyed certificate of stock, if the
corporation shall refuse to issue a new certificate in place thereof,
may apply to the supreme court, at any special term held in the district
where he resides, or in which the office of the corporation is located,
for an order requiring the corporation to show cause why it should not
be required to issue a new certificate in place of the one lost or
destroyed. The application shall be by petition, duly verified by the
owner, stating that it is made pursuant to this section, the name of the
corporation, the number and date of the certificate and to whom issued,
if known or if it can be ascertained by the petitioner, the number of
shares represented thereby, and as particular a statement of the
circumstances attending such loss or destruction as the petitioner can
give. Upon the presentation of the petition the court shall make an
order requiring the corporation to show cause, at a time and place
therein mentioned, why it should not issue a new certificate of stock in
place of the one described in the petition. A copy of the petition and
order shall be served on the corporation, in the manner prescribed for
the service of a summons in an action against a corporation, at least
twenty days before the return of the order to show cause. Notice of the
application shall be given to the stockholder of record if he is a
person other than the petitioner and if he is known to the petitioner,
and to such other persons as the court may direct; such notice shall be
given in such manner by publication or otherwise as the court may
direct.

2. Upon the return of the order, with proof of due service thereof,
the court shall inquire into the truth of the allegations of the
petition and hear the proofs of the parties in regard thereto. The
court, if satisfied that the petitioner is the lawful owner of the
shares, or any part thereof, described in the petition, and that the
certificate therefor has been lost or destroyed and cannot after due
diligence be found, and that no sufficient cause has been shown why a
new certificate should not be issued, shall make an order requiring the
corporation, within a time specified, to issue and deliver to the
petitioner a new certificate for the number of shares specified in the
order, upon the petitioner depositing in such public office as the court
may designate security or a bond to indemnify the corporation against
any liability or expense which it may incur by reason of the original
certificate remaining outstanding. Such security or bond shall be in an
amount which shall appear to the court sufficient in the circumstances
of the case to protect the interests of any persons to whom the
corporation may incur liability, and shall be in such form and with such
sureties as the court shall approve. The court may also in its
discretion order the payment of the corporation's reasonable costs and
counsel fees.

3. The issuance of a new certificate under an order of the court shall
not relieve the corporation from liability in damages to a transferee of
the original certificate in good faith and for value. The corporation
shall not be liable to any such transferee in an amount in excess of the
amount of the bond or the amount of the security required to be
deposited.

4. In case of conflict between this section and section 8--405 or
8--406 of the uniform commercial code, this section shall control.