Residents of Chelsea Co-op Allege Bribery in Lawsuit

Oct. 23, 2015 — It's no secret that sometimes the relationship between boards and building residents can be… toxic. And plenty of board members can attest that residents have accused them of taking kickbacks and bribes. Sometimes these accusations escalate and residents end up taking the matter to court. That's the case with one Chelsea co-op whose residents — well, a dozen of them, actually — claim, reports The Real Deal, "they were strong-armed into the shady sale of their building, alleging that the buyer, Galil Management, may have plied board members with cash or flashy new apartments." In the lawsuit, which was filed Tuesday in state Supreme Court, Galil and board members are accused of "concealing details of the building sale from the co-op's shareholders and harassing residents until they signed onto the deal, which needed 81 percent of the shareholders to succeed. The board members painted the building sale as an imperative move to avoid financial ruin for the co-op." According to TRD the group of residents say that during a shareholder meeting on August 19, the board informed them that if they didn't go through with the sail, the building would have to file for bankruptcy — a nightmare scenario that could have resulted in residents losing the entire value of their shares. "Galil also only gave the shareholders until Oct. 1 to agree to the sale and stipulated that the residents would need to be out by February 2016, effectively giving them only four months to find somewhere else to live," reports TRD, citing the lawsuit.