Cooperatives – What is the standard “Business judgment rule” or “unreasonably withholding consent”?
Have you purchased a cooperative and own shares and a proprietary lease?
Or are you a member of the Board of Directors?
Are you represented by lawyers who tell you the standard is the business judgment rule?
Think again, the standard is the contract rule of “unreasonably withholding consent” unless you are suing the individual board members and then the standard is “the business judgment rule”.
If the unreasonably withholding consent standard is found in the proprietary lease, the Board must have a reasonable reason to deny the purchase.
See the cases of: Ludwig v. 25 Plaza Tenants Corp.,184 A.D.2d 623 (1992)
2015 NY Slip Op 25401
MURRAY BERKOWITZ, AS ADMINISTRATOR FOR THE ESTATE OF MARTIN BERKOWITZ and ADMINISTRATOR FOR THE ESTATE OF SYLVIA BERKOWITZ, NOW DECEASED, Plaintiff,
29 WOODMERE BLVD. OWNERS’, INC., ALEXANDER WOLF & COMPANY, INC., STEVEN MIRKSY, ERIC J. KINNEY, JEANNE KINNEY, LON SAMUELSON, LISA ARIAN, FRANCINE ROSEN, AND ANGELA DALMAZIO, Defendants.
3203/2012.Supreme Court, Nassau County.
Decided December 2, 2015.Mildred J. Michalczyk, Esq., Plaintiff’s Attorney.
Ryan Mitola, Esq. of Schneider Mitola LLP, Defendants’ Attorney.
by LEONARD D. STEINMAN, J.