I can go into this further but for now what I'd like to know is could the co-op board run into legal problems if we were to present the expenses that this shareholder has cost the co-op at our next annual meeting? Can the shareholders be advised before the meeting? Secondly, can we proceed with any legal action against this objectionable shareholder, dependent on the cost involved?
“For the rest of this response, we will assume that the cooperative was the prevailing party.
“There is nothing wrong, per se, with disclosing in the annual financial audits or statements the amount of legal fees and expenses the cooperative has incurred and why (and truthful reference to the litigation and a neutral statement as to the outcome of those cases) would not be defamatory. For example, the annual report could state in a footnote on the expenses that with respect to the legal fees, the cooperative spent $X (out of the total legal expenses for the year) defending [or prosecuting] the case of [insert the name of the case, index number and court].
“If you are counting on that somehow to shame the shareholder into stopping his or her litigiousness, it will probably not be successful.