WHEN SPONSORS REFUSE TO SELL APARTMENTS, PART 2

Benjamin Hirsch, the principal sponsor of the 54-unit Kensington Terrace Apartments at 160 Ocean Parkway in Brooklyn, has kept control of the cooperative for more than five years — and board secretary Diane Stein (below) claims she is being unlawfully thwarted in carrying out her fiduciary duties. Since first being elected in 2003, she says, it's been a pitched battle with Hirsch, with the board fighting to refinance the building's mortgage and make other improvements and Hirsch refusing or ignoring them. She says he made all decisions on building repairs and mortgage terms by a majority vote (which he dictated) until an election in August 2007.

As a new board member in 2003, Stein she pushed for Hirsch to pay back-maintenance and arrears. In a letter that year to Deputy Attorney General Nancy Haber, Stein, who works for the International Brotherhood of Teamsters, said Hirsch owed back monies and was "involved in an active campaign to undermine the legally constituted Board of Directors … to milk the building for profit," and that in response to calls to repay, he used his shares to call for a new election.

It was scheduled for August 14, 2003 — the day of the Northeast Blackout, which stranded commuters. Hirsch held his meeting anyway in the darkened lobby of 160 Ocean Parkway, obtaining a statement from the building's doorman that a lawful meeting had been held. He says he used the meeting to approve a new insurance policy for the co-op, but Stein says he notified shareholders that he controlled a new board of directors. A sworn October 2008 affidavit by Stein at Kings County Supreme Court further says Hirsch treats the cooperative corporation as "his personal fiefdom, to prevent needed maintenance and repairs and cavalierly thwart the reasonable desires of the tenant cooperators."

No Good Deed Goes Unpunished

On August 27, 2007, Stein and other tenant-shareholders won seven seats on the board (later offering one seat to Hirsch since he still had an interest in the building). According to Stein, Hirsch then employed intimidation tactics, threatening her personally with litigation. She tried to reason with him: "I took him aside, and said, 'We would get farther if you would understand that you have to make people comfortable.' He replied, 'This is business, I don't have to make people comfortable.' "

The new board has moved to make needed repairs, including correcting elevator violations, but Hirsch is only paying maintenance and assessments that existed before the new board came on — and not any of the later increases, arguing that the current board is not valid. The board tried to refinance the mortgage for about $850,000 but Hirsch went to court. A judge then enjoined the board from making any long-term agreements, not wanting to rule immediately on who legitimately controlled the majority of co-op shares.

Hirsch, whose company owns a number of properties in central Brooklyn, denies Stein's charges and says she and other tenant-shareholders are overreacting. He insists that the interests of the sponsor are the same as those of the tenant-shareholders: to have a secure, well-managed and healthy property. "We want the building to run well," he says.

Hirsch notes that he became active in building affairs when a loan came due and Stein's group of tenant-shareholders wanted to refinance the building to a level of debt he called irresponsible. He says the tenant-shareholders mishandled a mortgage deal that would have locked in a low-interest rate some years back. "Crazy things were happening," he says, "and we had to get involved" in building management. He says he is the victim of shareholders who "send out scary letters and spread slander to get people riled up."