—Order, Supreme Court, New York County (Helen Freedman, J.), entered on or about September 20, 2000, which to the extent appealed from as limited by the briefs, and upon reargument, adhered to the initial denial of plaintiffs’ motion for preliminary injunction, unanimously reversed, on the law and the facts, without costs, the preliminary injunction granted and defendants enjoined from expending corporate funds in defense of the proceeding before the New York State Department of Insurance, and the matter remanded to Supreme Court for a determination of the amount of the bond that defendant Bruce Keyes must post. Appeal from order, same court and Justice, entered January 11, 2000, which denied plaintiffs’ application for a preliminary injunction, unanimously dismissed as superceded by the appeal from the subsequent order, without costs.
We find that it was an improvident exercise of discretion by the IAS court to deny plaintiffs injunctive relief. Where a corporation has no statutory authority to act, it will be enjoined from acting unlawfully regardless of the balance of factors enumerated under the standard test for injunctive relief (Donovan v Rothman, 253 AD2d 627). Pursuant to Business Corporation Law § 721, captioned “Nonexclusivity of statutory provisions for indemnification of directors and officers,” an officer or director may be entitled to indemnification, or the advancement of expenses including legal fees, if permitted by the Certificate of Incorporation or By-Laws, provided there has been no judgment which necessarily determines that the officer or director acted in bad faith or was deliberately dishonest. Prior to judgment, the payment of legal fees or indemnification of the officer or director may be made so long as there is a finding, either by the shareholders or by a quorum of a disinterested board of directors, that the officer or director acted in good faith and for corporate purposes (Business Corporation Law §§ 721, 722). The situation is different once there has been a judgment against the officer or director. While the statute makes no presumption that the judgment proves that the director or officer acted wrongfully toward the corporation, reimbursement would be precluded as a matter of law, if the judg