Hi there's no free lunch:
Since the coop's attorney freely engaged in communicating with a shareholder without disclosing any potential fee associated then the shareholder is not responsible. Too, there are no provisions in the governing documents and at the last shareholders meeting an amendment was shot down to cover such activity. The coop's attorney was responsible in declaring that he does not represent shareholders and needs to get board approval to engage in corresponding with a shareholder. None of this was done so it is a matter strictly between the attorney and the board to work out compensation.
Read: Recovering legal fees, by Bruce Cholst, Esq. The Cooperator. "Another limitation set forth in the typical proprietary lease clause regarding collection of attorney's fees is that it does not allow the recovery of any attorney fees prior to the commencement of a formal action or proceeding. Thus any pre-action analysis, correspondence, etc would not be recoverable."
So you see the shareholder has no liability for legal fees especially when the attorney made it clear to the NYSBA that he billed the coop and not the shareholder.
Any additional thoughts on this?
GU
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This is very interesting...
Legal recovery of charges at the court level has to be adjudicated by the judge. Therefore, the charges may be wiped b;y the judge and absorbed by the co-op!
AdC
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