A Queens Co-op Tries to Regroup After Board Politics Get Personal

She and her supporters claimed the rescinding of the resignation was not valid. "I contacted [our] attorney, and I said, 'She resigned, how could she now rescind her resignation three days later?' The attorney told us they could not do that. Once the person resigns, it becomes effective immediately. But she kept going to the board, and kept making decisions."

The ousted president and her followers subsequently boycotted the board meetings, while Winograd's disputed majority tried to replace Emanuela Lupu, senior associate at Smith, Buss & Jacobs and the building’s current attorney, with Eric Goidel, a partner at Borah, Goldstein, Altschuler, Nahins & Goidel. (Goidel says he was never formally retained but offered "some advice" to the Winograd board.)

"There was a lot of disagreement on the board for some time," recalls Lupu. "At my insistence, and at the insistence of Goidel, I said, 'You guys can't go on like this. You need to at least have an election.' They had staggered terms. They hadn't received a quorum in years. Because of their particular bylaws that don't allow proxies it becomes difficult to achieve a quorum." The two sides finally agreed to hold a long-overdue annual meeting with a legal quorum — and conduct a valid election of a new board of directors.

The meeting was set for December 3, 2014. Olga Desrosiers and her side, then the minority, campaigned fiercely as the election neared. "Our faction put up posters; we went door to door," she says. "Our message was that we could more efficiently manage the co-op's funds."

Finally, the big night arrived. A quorum was present, although many in attendance were new shareholders from Asia who didn't speak English. The majority faction, fearing trouble from Joseph Desrosiers, had hired an armed security guard to attend. On her way to the gathering, Danielle Rachlin got a phone call that the security guard had been ordered to leave the meeting by the "owner" of the building, even though the corporation's shareholders are the legal owners of the building. The police was called, and officers arrived.

"It became chaotic, a really ugly scene," says Rachlin. "Olga stood up and said we stole $150,000." From there, the sequence of events becomes unclear. Both sides agree that Rachlin Management was not wanted at the meeting and that the police were called. Once a quorum was finally confirmed, the vote took place. After the ballots were counted, Olga Desrosiers's side had won eight seats, becoming a solid majority.

One of the first actions the board took was to fire Rachlin, and hire Newgent Management. In light of the accusations, Rachlin's attorney advised the management company to demand a forensic audit before handing over the books to Newgent, but the board ignored this request.

"We told them they would have to have someone go through the files and sign off that what's supposed to be there is there," Rachlin says. After nearly a month, "someone from [Newgent] came and signed off and took the files. We kept the list and got it notarized as an affidavit. Every penny is accounted for."

Emotions Run Amuck

It usually goes without saying, but in this case it needs to be said: when you're on a co-op board, you need to act in a business-like manner. "Emotions should not be part of the equation," says an accountant who did some work for the co-op and spoke on the condition of anonymity, fearing reprisals from the current board. "You should deal in facts, not rumors. Having factions and politics does not make for a pleasant working environment or living arrangement. That's not the way to do business."

A former board member adds: "The problem was that one individual wanted to do things their own way — regardless of what the bylaws said."

Switching to new management is often difficult, and one of the largest tasks is accounting for all the documents. "It's overwhelmingly normal that I have issues where documents are 'missing,'" Lupu observes. "I think that the jury's split on whether or not those documents are really missing, or just can't be found. You get 40 boxes of documents, and who is digging through them? I have to say to the managers: 'Did you guys actually go through every single paper and every single box that came to you?'"

In the end, she says, the battle of the boards and the showdown at Sherwood could have been avoided by applying less heat and more common sense. When making a management transition, experts say, it pays to be reasonable. Concludes Lupu: "It's about professionalism, nothing more."