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Hello. A co-op board member/president wants to purchase an additional apt/shares from a sponsor. A couple of other board members as well as some shareholders are aware of a proposed kickback scheme by the purchasing board member (unknown if any "benefit" has been consummated). It is understood that the same board member has attempted and acted on other very unethical, illegal arrangements and behavior in the context of coop governance. Should and could the remaining board members refuse to endorse shares and any other purchase-related documents due to this knowledge and therefore sink the purchase ? It seems to me that cooperating with the shady board member's enhancement of his presence in the corporation is not only unethical and immoral but would practically render the board members vulnerable to liability. Does anyone out there agree ?
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Sounds like the wrong approach to the problem, assuming you're talking about a sponsor-owned apartment that has never been occupied by a shareholder. In that case, the shares associated with the apartment are "unsold shares." By blocking the transfer, you'll be in default under the proprietary lease, based on the clause that runs something like this: "Neither the subletting of the apartment nor the assignment of this lease, by the Lessee who is the holder of the block of Unsold Shares allocated thereto, shall require the consents of the Directors or shareholders ..."
Talk to your attorney for advice on how to proceed. Deliberately defaulting on the lease is almost never a good idea.
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