(dissenting). Respondents-appellants—Corporation Counsel of the City of New York, P.R.F. Realty Corp., and 420-172 East Associates—appeal from an order and judgment of the Supreme Court which granted the petition in a CPLR article 78 proceeding brought by tenant associations in two adjoining buildings, to the extent of (1) vacating the Corporation Counsel’s approval of P.R.F. Realty Corp.’s application seeking release of the city’s interest in the property; (2) voiding the transfer of the buildings from P.R.F. Realty Corp. to 420-172 East Associates; and (3) revesting title to the buildings to the City of New York.
As the I.A.S. Judge appropriately concluded, the central issue in this case is the same as that which the court addressed in Matter of Lewis v Schwartz (119 AD2d 116). Although circumstances are presented here that might arguably *378support, consistent with the rule set forth in Matter of Lewis v Schwartz, a result contrary to that reached by the I.A.S. court, I agree that the court had a substantial basis for considering the Lewis decision to be dispositive.
The issue is whether or not a dissolved corporation which owned property foreclosed for delinquent taxes qualifies as a "party who had an interest in [property acquired by in rem tax foreclosure] as * * * owner * * * at the time of the city’s acquisition thereof’ pursuant to section D17-25.0 (a) of the Administrative Code of the City of New York such that it is eligible to seek release of the foreclosed property.
In Matter of Lewis v Schwartz (supra), this court held, in a decision to which I then subscribed as a member of the panel, that a corporation dissolved because of failure to pay franchise taxes, was ineligible to seek release of foreclosed property. In the light of the appellate presentation in this case, and on the basis of further consideration, I am now persuaded that this conclusion was erroneous, and that the rule set forth in Matter of Lewis v Schwartz should be overruled.
Business Corporation Law § 1005, the statutory section regulating the powers of a dissolved corporation, provides in pertinent part as follows:
"(1) The corporation shall carry on no business except for the purpose of winding up its affairs.
"(2) The corporation shall proceed to wind up its affairs, with power to fulfill or discharge its contracts, collect its assets, sell its assets for cash at public or private sale, discharge or pay its liabilities, and do all other acts appropriate to liquidate its business.” (Business Corporation Law § 1005 [a] [1], [2].)
The critical language in the above-quoted section is that part of subdivision (a) (2) which authorizes a corporation to "collect its assets”. In the light of this explicit statutory language, the rule set forth in Matter of Lewis v Schwartz (supra) necessarily depends on a determination that property owned at the time of the city’s acquisition as to which the owner is eligible to seek release is not an asset. With all due respect, this proposition seems to me untenable.
Manifestly, the property as to which the owner at the time of foreclosure has the right to seek release is an asset, as the facts of this case clearly illustrate. Particularly is this clear where, as here, the application for release is made within four months after the date of the city’s acquisition of the property. *379In that circumstance, section D17-25.0 (f) of the Administrative Code explicitly provides that the application "shall be granted” subject to compliance with certain procedural requirements.
The record is clear that P.R.F. Realty Corp., owner of the foreclosed properties, made an application, complying with all procedural requirements, for release to it of the foreclosed property at a time when it became the mandatory obligation of the city to grant the application, which the city did, in compliance with the applicable law. The application was made for the purpose of enabling the applicant to sell the property to 420-172 East Associates for a sum that was to be applied, and was applied, to the discharge of all outstanding tax liabilities. In short, P.R.F. Realty Corp., in scrupulous compliance with the provisions of section 1005 of the Business Corporation Law, collected its principal asset and did so to sell it, with a view to discharging its principal liability in connection with the liquidation of its business. It is difficult to envisage a course of conduct more consistent with the directions set forth in the controlling statute.
In reviewing this court’s opinion in Matter of Lewis v Schwartz (supra), it seems to me reasonable to infer that the underlying issue was obscured by extraneous facts, including doubts as to the bona fides of the sale of the property, which gave rise to complicated but irrelevant legal arguments. In addition, there were circumstances which collectively indicated that sustaining the release of the property would cause a severe injustice to tenants who, after their landlord’s neglect of his obligations, had made substantial improvements to the building, had applied for admission to the city’s Tenant Interim Leasing Program with the objective of purchasing the building, and which, as the court’s opinion noted (at 117): "The record shows that the tenant’s application would have been approved but for the city’s decision here at issue to return the building”.
As I have already suggested, distinguishing factors are presented here which might at least arguably support the result here urged on grounds consistent with the rule set forth in Matter of Lewis v Schwartz. In particular, it appears that in this case, unlike Lewis, the purchaser bought the properties and thereby discharged the tax liabilities in reliance upon the city’s approval of the application for their release, and prior to any challenge to the validity of that action having been undertaken by the petitioners. Pertinently, the record is clear *380that petitioners were aware of the city’s approval of the application some months before the purchase of the property and undertook no challenge to that action during the intervening period. Moreover, it seems to me at least doubtful under the circumstances presented that the petitioners had standing to commence this article 78 proceeding. Although the tenants associations with which we are here concerned had applied for admission to the city’s Tenant Interim Leasing Program, there is no suggestion in this record, contrary to the situation in Matter of Lewis v Schwartz (119 AD2d 116, supra) that the application would have been approved except for the release of the foreclosed property.
In view of my conclusion that P.R.F. Realty Corp., though dissolved for failure to pay franchise taxes, was eligible to seek release of the property it had owned at the time of the city’s acquisition, and that the city’s approval of the application was mandated by law, I think it unnecessary to decide these and other issues that might distinguish this case from Matter of Lewis v Schwartz (supra).
The underlying facts of this case, as well as those presented in Matter of Lewis v Schwartz, make appropriate a comment on an issue of public policy that appears to merit legislative consideration. When one examines the provisions of Administrative Code § D17-25.0 relating to applications to the city for release of property acquired by in rem tax foreclosure, it is apparent that the several provisions represent primarily an effort to facilitate the city’s collection of tax arrears. There appears no consideration in these provisions of the special situation presented where a delinquent taxpayer has also been a neglectful landlord, and in which tenants who have suffered in their daily lives because of that neglect have organized themselves in an effort to improve their living conditions and have undertaken to participate in a program which in particular situations permits their purchase of the buildings in which they live.
Appreciating the limits of information available to an appellate Judge confined to a particular record, it would seem that there are values to be served in such a situation that are not reflected, in the provisions of the governing statute. In particular, the question could be raised as to whether or not some such combination of circumstances might not justify a limited exception to that subdivision which mandates acceptance of an application to release foreclosed property if made within a four-month period. It may, of course, be that there are practi*381cal considerations that would make such an exception counterproductive on a more balanced view of the matter than is available to an appellate Judge. The possibility of some such change would seem to merit legislative consideration.
Accordingly, the order and judgment (one paper) of the Supreme Court, New York County (Helen E. Freedman, J.), entered February 18, 1987, which, in an article 78 proceeding, granted the petition to the extent of (1) vacating the Corporation Counsel’s approval of P.R.F. Realty Corp.’s application seeking release of the city’s interest in the property; (2) voiding the transfer of the building to 420-172 East Associates; and (3) revesting title to the building to the City of New York should be reversed, and the petition should be dismissed.
Murphy, P. J., and Smith, J., concur with Ellerin, J.; Sandler and Sullivan, JJ., dissent in an opinion by Sandler, J.
Order and judgment (one paper), Supreme Court, New York County, entered on February 18, 1987, affirmed, without costs and without disbursements.