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I am a shareholder in a small low-income coop with an extremely corrupt board, where the board president has also been manager and building broker for over two decades.
The annual shareholder meeting has been scheduled for early December.
Throughout the year(s), there has been no board communication, misinformation or lack of information from the board of directors to shareholders. Important issues have not been dealt with and year after year the same people get elected and are controlled by this one person.
I want to know if there is a way to legally postpone the annual shareholder meeting because issues of importance have not been addressed, possibly getting outside help to educate the shareholders of alternatives. Who can I call upon for help?
I hope this question is clear. And thanks to all for any advice.
RLM-
Below are answers to your questions, thank you!
Yes, I said managing agent as well as BP.
There were seven board members, the same people obviously. That is last year when I attended the annual shareholder meeting, although anything is possible and it could have dwindled down to 5.
This person owns their apartment, but controls the voting of many shareholders, some absentee, so things like proxy voting? Oh, it's a big mess with no accountability.
The Pres/Manager is NOT a licensed RE broker BUT has "brokered" out apartments, both sales and rentals. There are self-dealing, conflict of interest issues (sale of one apartment to children of an employee of BP/Mgr/Brkr's managing company (as person also manages a "market value" coop outside the building) also rentals to business associates, etc.
I am a longtime tenant/shareholder in a low-income HDFC coop, one of many formerly NYC owned buildings sold to us by the city at a very low price. These coops are rife with corruption.
I have served on the board on and off throughout the years.
A few years ago, I returned to the board upon several board members request and began to question “authority” and ask for transparency from this person. I became the lone voice of reason. Since then I have been punished. Two years ago I got frozen out of serving altogether, so now I am an “outsider”. The same people (one is VP) who beckoned me back, rolled over to the BP/Manager/Broker (out of fear or favoritism) and have backed his/her bullying, slandering, etc. against me. I have become the “disruptive shareholder” (the truth can be disruptive, I guess), ostracized and dealt with as if I am a crazy and physically threatening person. This one person has turned the whole building against me through their lies.
Yes, I have a paper trail that indicates that the board (most specifically this BP/Mgr/Broker) has violated their fiduciary responsibilities and sought to get me back for being a “troublemaker”. Board meeting recordings that indicate fraud. I have had to be my own investigator, legal researcher and advocate. The City of New York (Housing Preservation and Development) says there are hundreds of low income (HDFC) coops warranting a financial audit and yet they drag their feet.
Have gone to all the appropriate agencies, it's a vicious cycle. At one point tried to interest the BP/Mgr/Brkr in mediatiing with me.
The bottom line is that there is no accountability to be found in my coop and no advocacy from the outside. BECAUSE as the law stands presently THE BOARD RULES and has final say, not a minority shareholder.
I am of limited funds so it's hard to engage counsel, even though I've been told I have a case.
As last year's annual shareholder meeting turned into a tribunal against me, with our attending corporate lawyer fortifying the side that pays him, the corrupt board the thought of another night like that makes me ill.
I know this much...in a market value coop, this abuse of power (one person being Pres/Manager/Broker) is pretty much none existent or nipped in the bud pretty quickly.
In HDFCs it is rampant.
I'll keep trying to organize with other HDFC shareholders in the same boat and in the meantime will take some of the suggestions you have offered.
Thank you all for your responses. Keep them coming.
p.s.- Are there any pro-bono attorneys out there reading this, interested in assisting in any way?
A annual shareholder meeting can be postponed if a quorum is NOT reached. A quorum is usually 51% of the shareholder body. If you encourage people not to hand in their proxy statements or attend the meeting, the quorum won't be reached and the meeting will be postponed.
9449, I don't think you can postpone your annual meeting and if it's in early Dec, at this point you have no time left and it sounds like you're in for at least another year with the same corrupt board. But if you're really serious about this and act fast, you may be able to do some good.
YOU should run for the board and get others to run too. Try to get a new majority in so you can outvote the corrupt ones on issues. You're in a small coop. How small? If you have 12 apts, this is tough but with even 20-25 apts and a board of 5, all you need is you and 2 others to be elected.
If corruption has gone on for years, your Shs probably feel they can't change things and there's no use trying. You have to convince them otherwise - and that won't be easy. You have to be fired up in a positive way before you can get them fired up. You have to convince them that THEY are the ones who can turn things around by voting out corrupt board members and that YOU and the others who run will make changes that will make the coop better for all of them.
You have to take the ball and run with it. Start now and use the time you have before the annual meeting. At the very least, put pressure on the president and the rest of the board at the meeting - and don't let them sidestep you. Ask very pointed questions about when this will be done, why that hasn't been done, when they can expect whatever. If you haven't gotten an annual financial statement, ask why not and when you'll get it. If you did get it, ask the board questions about expenses, etc.
Here's an idea. You say that important issues have not been dealt with. Make a list of them, start talking to Shs now and give them a copy of the list. Tell them you're going to start working together and here is a list of things you all need to ask the board about at the meeting and get answers for. Tell them they can make a difference if they stick together. Just list issues simply on a sheet of paper. Get the momentum up. You and other Shs who agree to run for the board with you will probably have to stir things up at the meeting if people ask questions too timidly or if the board tries to bypass questions or bluff their way out of them.
There's a lot of things I could suggest and I'm sure others in this e-group will have many ideas too. But it looks like effecting any change has to start with you. I hope my post here is of some help.
If a quorum is not reached, the meeting can be postponed for at least one week. Although that may not be enough time. Check your co-op's documents on proper protocol.
There is more than one way..
"V" makes a good point...
the questions posed by the other members should be answered first however to determine your course of action... especially knowing if the PB/MA controlls the coop by owning the majoprity of shares, and what is the share ratio... how many agree with you, vs the BP.
Read your Proprietary Lease and Bylaws. They may give you an idea. For example, look to make sure the meeting was called with enough advance notice, as per your documents. If not, then you might have grounds to delay it.
Request a copy of the shareholders list, and write all of the shareholders asking them to 1) not show up and 2) not submit proxies. That way, no business could be done at the meeting anyway b/c there wouldn't be X% (often times a majority) of the votes present necessary to hold it.
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The BP is also your managing agent? AND a RE broker as well?
What percentage of shares does he/she control?
How many members on the board?
Are you a new shareholder or been there awhile?
Other than your opinion, and the "look" of things, do you have proof the board is corrupt?
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