It's true that the apt could be sold off quickly, such as at an auction, at a below-market price. I see your point there. It's also possible that the bank will choose to sell the apt through a broker, with open houses and all the trimmings, in hopes of making more profit. Of course, it's hard to say which direction they'll go.

The bottom line, however, is granting or denying the shareholder's HELOC. I'm no financial expert by any means, but I would expect that even if the board says no, the shareholder will find another way to borrow the money. And incur the shareholder's wrath toward the board.