does a co-op shareholder have the right to know who the corporation attorney is?

What are the rights of shareholders in an Investment Co-op?

Typically, the bylaws and proprietary lease will let residents and board members know when annual shareholder meetings and elections to the board of directors are held, and how notice is given; the rules governing sponsors and how many seats they may be allotted on the board of directors; when a special meeting can be called; the specific procedures for amending the …

What are the shareholders of a co-operative called?

In addition, under Business Corporation Law, Section 624(b), shareholders have the explicit right to obtain the names and addresses of other shareholder-tenants in connection with an election. Indeed, under a recent court decision, management is required to provide such contact information ‘in written form and any other format in which the [corporation’s] managing agent …

Do the majority of co-op Shareholders have concerns with management?

The foundation for any co-operative is its shareholders (often called “members”). Co-operative shareholders can support their business financially by contributing start-up funds and/or using its services. Co-operatives that raise funds by selling shares (and those that collect membership fees) need to have a good idea of who their members ...

Can a lawyer represent the Corporation of a company?

Owners and Officers Have No Authority to Retain Counsel for the Company. A Texas corporation or LLC may not direct litigation and hire an attorney unless sanctioned by its governing authority—i.e., a majority of the board of directors or managers. In Street Star Designs, LLC v. Gregory, two members of an LLC brought suit on behalf of the ...

Can coop board members be sued?

How do you fight a co-op board?

What is the role of stockholders in a co-op?

How do you remove a co-op board of directors?

How often do co-op boards reject?

Do coops have a fiduciary responsibility to shareholders?

Who are the stakeholders in the co-op?

Who are the shareholders in a cooperative?

How are co-op shares determined?

WHO removes board members?

Can a board vote to remove a director?

What can cause a board member to be removed?

What does it mean to be a member of a co-op?

Being a member/shareholder in a co-operative. Becoming a member of a co-op also makes you an owner. This usually includes getting to vote on major decisions, an opportunity to run for a board position, dividends, and access to information about the co-operative. However, being a member also comes with responsibilities, ...

What are the different types of co-op shares?

Co-ops issue two different types of shares: membership and investment. Membership shares (sometimes called “common shares”) usually cost less, but give shareholders more control ...

What is the foundation of a co-operative?

The foundation for any co-operative is its shareholders ( often called “members”). Co-operative shareholders can support their business financially by contributing start-up funds and/or using its services. Co-operatives that raise funds by selling shares (and those that collect membership fees) need to have a good idea of who their members are ...

What is membership share?

Membership shares (sometimes called “common shares”) usually cost less, but give shareholders more control of the co-op. Buying a membership share makes you an owner of the co-op and gives you the right to vote or run for the board. Buying an investment share (sometimes called a “preferred share”) means making a greater investment in ...

How do co-op raise funds?

Co-operatives that raise funds by selling shares (and those that collect membership fees) need to have a good idea of who their members are and how they can contribute to set the co-op up for success.

How does a co-op work?

Every co-op has a board of directors that oversees its operations. This board is ele cted by the membership shareholders. It’s important to set up a governance system that allows all shareholders (and different classes of shareholders, if you have them) to provide input into how the business is run.

Do investment shares give you ownership rights?

These shares, however, don’t give you the ownership rights that membership shares do. Investment shareholders are usually restricted to holding 20% of board seats, and must also purchase a membership share to gain these member rights.

What does a lawyer represent in a corporation?

Even in non-deadlock situations, there may be issues with the authority of corporate officers hiring corporate counsel, if the controlling owner fails to or does not wish to convene a board meeting. Also in disputes among owners of companies over control, or misconduct, the interests of the company may be very different from those of the individual owners. “A lawyer employed or retained by an organization represents the entity.” An attorney representing a corporation does not represent its directors, officers, shareholders, employees, members, or other constituents. The corporation’s lawyer has “but one client—the corporation.” Attorneys may not represent the interests of one group of owners against the interests of another under the guise of representing the corporation.

Why is the president of a corporation authorized solely?

The appellate court held that there was no basis for the claim that “the president of a corporation is authorized solely because of his office to initiate litigation on behalf of the company and employ legal counsel for that purpose.”. Rather, the board of directors had the statutory right to manage the affairs of the corporation, ...

What happens when an attorney is challenged?

At the hearing on the motion, the challenged attorney has the burden to show sufficient authority to prosecute or defend the suit on behalf of his client, a party to the lawsuit.

Why did the defendants move to dismiss the complaint?

The defendants moved to dismiss the complaint because a majority of the LLC’s governing authority—the four members—had not authorized the suit on behalf of the company. The Street Star Designs, LLC board was deadlocked two-to-two.

What was the law in Lewis v. Shaffer Stores?

Shaffer Stores, Co ., the federal district court ordered the corporation to obtain separate, independent counsel to represent the company in the derivative suit, “who have had no previous connection with the corporation,” and who were to file an answer on behalf of the corporation after their own investigation of the facts. The federal district court in Messing v. FDI, Inc., faced with a similar situation, held that the corporation was required to obtain independent counsel, “unshackled by any ties to the directors,” to advise it of its most favorable course of action. In Rowen v. LeMars Mut. Ins. Co. of Iowa, the Iowa Supreme Court ordered the trial court to appoint independent counsel for the corporation.

What was the case in Square 67 Development Corporation v. Red Oak State Bank?

In Square 67 Development Corporation v. Red Oak State Bank, the president of a corporation hired an attorney to prosecute a conversion action against a bank. The bank filed a Rule 12 Motion to Show Authority and attacked the attorney’s power to prosecute the action because the Square 67’s board of directors did not authorize the attorney’s employment. The trial court agreed with the bank and dismissed the action. On appeal, the president argued that, simply under his executive authority within the corporation, he was empowered to retain an attorney and file suit. The appellate court held that there was no basis for the claim that “the president of a corporation is authorized solely because of his office to initiate litigation on behalf of the company and employ legal counsel for that purpose.” Rather, the board of directors had the statutory right to manage the affairs of the corporation, and “the president of a corporation is not authorized to employ an attorney to conduct litigation for the company absent express authority or implied authority . . . set forth in the bylaws or by proper action of the board of directors.” The court ruled that the attorney did not have authority to prosecute the action, and upheld the dismissal.

What happens when a business owner is deadlocked?

Very frequently in business owner disputes, the company is deadlocked, but one of the parties remains in control. Typical examples include corporations with two directors, LLC’s with two managers (or two members, if member-managed). Sometimes, a minority shareholder or member will have negotiated a veto right at the board level. Almost always, one of the owners will still be functioning as the “president” or general manager and have day-to-day control. This situation is often an occasion for oppressive conduct. Very frequently, the officer remaining in control of the company will retain corporate lawyers to represent the company and sue the other owner or have the corporate lawyers defend against derivative claims by the other owner. Attorneys stepping into that representation should be cautious because the owner in control probably has no authority to retain counsel on behalf of the company.

What is the McConnell ruling?

McConnell cites a 1976 appellate court ruling that established the principle that shareholders of a corporation are entitled to lists of the other shareholders, including their addresses. Courts have ruled that these records are entirely relevant and appropriate to request in a proxy fight.

What court did Goldstein appeal to?

Following a defeat in state Supreme Court in 2013, the Acropolis board appealed Goldstein's case to the Appellate level. But a year later the higher court upheld the lower court's ruling that Goldstein was entitled to a full list of the co-op's shareholders and their mailing addresses.

Do co-op shareholders have to give their phone numbers?

But a recent New York Law Journal article by Eva Talel and Richard Siegler, of the firm Stroock & Stroock & Lavan, maintains that co-op shareholders do not have the right to other shareholders’ phone numbers and email addresses, although the pattern of recent court decisions suggests that the law might soon evolve in that direction.

Can shareholders share corporate documents with other shareholders?

Greenspun adds that he wouldn’t advise posting a list of the shareholders on the internet, but he does believe that shareholders are within their rights to share corporate documents with other shareholders.

Can shareholders copy the minutes of a board meeting?

McConnell observes that shareholders could also make a claim to the co-op's monthly financial records, in addition to the annual audited statements that are ordinarily delivered to them. Shareholders can also ask for the minutes to all shareholder, board and officer meetings. Shareholders have the right to copy those records.

Is a corporate document a private property?

Corporate documents, as it turns out, are not the private property of co-op boards.

Can a shareholder request affidavits?

Moreover, the shareholder must request the documents in writing with at least five days of advance notice, according to Talel and Siegler. These conditions are usually spelled out in the corporate by-laws.

What rights do shareholders have in a co-op?

In the latest decision on co-op shareholders’ ever-expanding rights, the state Supreme Court has affirmed that shareholders are entitled to broad access to a co-op’s books and records, including the right to copy both print and electronic versions. The ruling buttresses earlier decisions granting requests to inspect and copy documents in both co-ops and condominiums, as long as the requests are made “in good faith and for a valid purpose” – and the person inspecting the documents agrees to sign a confidentiality agreement. In this latest case, the shareholder was deemed to be operating in good faith even though he was already involved in litigation against the board.

What did the board feel about the income side of the ledger?

The board felt that the income side of the ledger was not relevant to his concerns, but the court felt differently.

What is a co-op in real estate?

A co-op is structured differently than a condominium. The co-op is a business that owns the real estate. The co-op is not the real estate itself. When you buy into a co-op, you are purchasing shares of a corporation. As a shareholder, you own a portion of the business and are one of the many owners of the real estate (though there are non-equity co-ops, too, which work a bit differently). Also, as a shareholder, you are given exclusive rights to and use of one of the housing units on the property.

Why do you sue a co-op?

One of the reasons to think carefully about suing your co-op is the cost. Any lawsuit is going to take time and a financial investment. Additionally, your agreement with your co-op may specify that if you sue and lose, you can be forced to pay the co-ops attorneys’ fees and court costs. Financially, it may be smarter to talk with an attorney about going through the co-op board’s designated processes to try and resolve the situation.

What are co-ops in housing?

Housing cooperatives, better known as co-ops, can be ideal living situations for individuals who value community, financial stability, and want something slightly cheaper than a condo. However, as in any living situation, problems can arise. You may have disputes with the rest of the co-op members or the governing body, which may be a board of directors depending on how your co-op is structured. If this dispute is based on the co-op breaking the law, breaching its contract with you, or failing to uphold its duties to the co-op members, then you may need to discuss filing a lawsuit with a lawyer.

What is the best way to resolve a dispute outside of court?

An attorney might recommend utilizing an alternative dispute resolution method, such as mediation or arbitration, with the co-op to resolve the issue outside of court. Mediation or arbitration can also take time and accumulate costs, but they are known for being less costly than a lengthy and contentious lawsuit.

How are co-ops run?

Co-ops may be run differently depending on their structure and size. Smaller co-ops tend to be highly cooperative living arrangements in which every resident has a say and helps maintain the real estate. Larger co-ops tend to have a board of directors, made up of a small percentage of residents, which makes significant decisions for the property.

What to do if you are co-op and you are being violated?

If you and the co-op cannot come to a resolution, and you believe your rights are being violated, call an attorney to discuss your options. By talking with a residential real estate attorney, you will gain an experienced and knowledgeable opinion regarding your rights and the relevant law, and whether your rights or the law have been violated. A lawyer also can provide insight into the possible and likely outcomes of a lawsuit.

What does it mean to be a shareholder?

As a shareholder, you own a portion of the business and are one of the many owners of the real estate (though there are non-equity co-ops, too, which work a bit differently). Also, as a shareholder, you are given exclusive rights to and use of one of the housing units on the property.

Where is Steven Gursky's co-op?

Steven Gursky and his wife were well aware of the conflicts that can arise when they moved into the co-op at 35 Sutton Place on the Upper East Side of Manhattan eight years ago. “We made a commitment to each other to stay out of the co-op fray,” he said. That vow didn’t last long.

Is there a criminal prosecution for board members?

Criminal prosecution of board members is also rare. In one such instance, the president of the board at Co-Op City in the Bron x pleaded guilty in 2007 to taking kickbacks for awarding a painting contract.

Do condo boards have to act in the best interests of the building?

Co-op and condo board members are required to act only in the building’s best interests, not for their own benefit, said Steven Wagner, a partner at the law firm Wagner Berkow. A board member cannot represent the co-op’s best interests when he or she stands to make money from the board’s decisions, Mr. Wagner said.

Is a co-op board battle contentious?

Co-op board battles are often contentious and can be particularly fraught since they are tied to people’s homes, likely their most substantial financial investments. Ms. Liang and other shareholders have learned through their efforts that because there is no agency responsible for regulating co-op and condo board behavior, there is little recourse for shareholders if they believe a board is misbehaving, other than to take on the significant expense and time required to file a lawsuit.

Can brokers serve themselves?

Some boards prohibit brokers from serving and others require that they recuse themselves from decisions related to their listings, said Aaron Shmulewitz, a partner at Belkin Burden Wenig & Goldman. “A bad person can take advantage of the system,” Mr. Shmulewitz said.

Can the New York City Commission on Human Rights change a board?

Another possible avenue for relief is the New York City Commission on Human Rights, but it acts solely on cases of discrimination. Elections are really the only way to change a board, said Mary Ann Rothman, the executive director of the Council of New York Cooperatives and Condominiums.

Does the state attorney general have jurisdiction over condos?

Liang contacted the state attorney general’s office over a year ago asking it to investigate Mr. Mohd, but it has jurisdiction only over condo and co-op offering plans .

Who has the right to inspect the books and records of all subsidiaries of a corporation?

A shareholder of a corporation has the right to inspect the books and records of all subsidiaries of that corporation.

Who has the right to inspect a corporation's stock ledger?

A qualified shareholder enjoys a near-absolute right to inspect a corporation’s “stock ledger” or “list of stockholders.”

What is the purpose of Chavco v Pybus?

v. Pybus, the court held that the stated purpose “ [of] determin [ing] whether the rental on a building, the principal asset of the corporation, was a reasonable rental or whether the rental was so unreasonably low as to result in corporate waste,” and “examining expenditures, determining whether there was excessive compensation being paid to officers and directors, whether corporate funds were used for personal purposes, and whether there was corporate mismanagement . . . . were clearly proper and legitimate reasons for wanting to inspect the books of the corporation.”

What is the problem with a corporation refusing to allow inspection?

The problem arises when the corporation believes that the purpose stated is not the true purpose or that there is another purpose that is improper. “And it is very easy for controlling shareholders to view any request to inspect with suspicion that easily could lead to the rejection of a request on the ground that a claimed ‘proper purpose’ was in fact ‘improper.’” The issue of what is the true purpose and whether that purpose is improper must be resolved through the courts once the corporation refuses to allow inspection. That issue will be dealt with in a separate article on the enforcement of inspection rights.

What amendment does Texas have to work product?

Although not addressed yet by Texas courts, the rule excluding attorney–client privileged documents from shareholder inspection should also apply to the work product of the corporation’s attorney and consulting experts. Fifth Amendment .

What happens if the purpose stated is not proper?

However, if the purpose stated is not proper, then the corporation will have an easy time resisting any effort to enforce the shareholder’s inspection rights. Therefore, care should be taken to state purposes in the demand that are recognized as proper.

Why do courts encourage plaintiffs to seek inspection of corporate records first?

Nonetheless, courts encourage plaintiffs to seek inspection of corporate records first because of “the additional burden that a post-complaint books and records action may place on a defendant-corporation . . . .”. Communication with Other Shareholders.