Plaintiff is a publicly traded closed-end investment company, and the individual defendant is the founder and controlling person of defendant management companies. Plaintiff moved for partial summary judgment declaring that certain brokerage accounts were not valid joint tenancies under New York law. The Appellate Division noted that there are two key features in every joint tenancy. First, during the life of the tenancy, each tenant is entitled to one-half of the assets, even if only one tenant may have established and contributed to the asset. Second, upon the death of one of the tenants, the whole fund will vest in the surviving joint tenant. Accordingly, the Appellate Division affirmed the motion court's conclusion that a valid joint tenancy was never created, regardless of the individual defendant's professed intent, because the Participant Agreement makes it clear that the participants were not entitled to one-half the funds in the accounts. Moreover, at least one version of the Participant Agreement limited the participants' entitlement to only 5%, as opposed to 100%, of the funds in the account in the event he or she outlived the individual defendant.
Prospect Capital Corp. v. Lathen, NY Slip Op 01431 (1st De['t March 4, 2021)
