Subscribe for Daily Updates!
Is a sponsor's representative legally entitled to a prospective shareholder's application information?
We have a sponsor that is attempting to sway new shareholders to his side so he can attempt to get control of the board. He recently demanded he be provided a copy of a prospective shareholder's application and demanded to be present at the interview.
As JG said, if the sponsor has a seat on the board then they are entitled to receive the same financial package for review as every other board member. If not, I don't believe they are entitled to that information unless stated otherwise in your proprietary lease and bylaws.
If you feel that the sponsor will make a play for board majority, you should plan to try to sway new purchasers towards supporting the non-sponsor board members. You're lucky you have some advance warning of their plans and tactics so you can properly prepare for them when the time comes.
Introduce yourself to other members of Board Talk! Log in below or register here.
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.
I would say that you need to read your governing documents first. Do you have a committee established to review applications? If so, does the board accept their decision without question? Or does the board do the interviews? As a sponsor rep holding a seat on the board, I would think that he's entitled to sit in on any board business, including interviews, and cast a vote as well, unless there in something in the governing documents to the contrary.
In my building, the sponsor does not participate in interviews for buyers, but there is nothing in our governing documents preventing him.
Thank you for rating!
You have already rated this page, you can only rate it once!
Your rating has been changed, thanks for rating!
Board Talk members who registered prior to March 9th, 2016 will need to reset their password.