Q. My co-op has not had an election of new board members in over 20 years. The president sends a notice of the annual meeting--’come for coffee and donuts’-- but never mentions there is an election due. Now she is holding the annual meeting at a time in the month when most people will not be able to attend, therefore a quorum cannot be met. She is running a reign of terror. How can we get her off the board and elect new members?
—Enough is enough
A. “First off, pursuant to the New York Business Corporation Law (BCL) and likely the co-op’s bylaws,” says attorney Leni Morrison Cummins from the New York office of Cozen O’Connor, “the board is required to hold elections each year at its annual meeting of shareholders. Not all seats must be up for election each year as staggered terms are permissible – terms may run between one and four years. Further, annual meetings must be held annually and shall be called by formal notice as required by the bylaws. Typically notices must state the when and where (and sometimes why) and must be mailed in a set manner a specified number of days before the meeting. All of the foregoing should be spelled out by the co-op’s bylaws.
“Pursuant to the BCL, there are procedures that empower shareholders to take action in circumstances where annual meetings/elections are not called. Section 603 gives a minority shareholder stake (10%) the right to demand a special meeting for an election of directors in certain circumstances. If those circumstances do not exist, Section 619 empowers to the supreme court to hear challenges to elections upon the petition of any shareholder aggrieved by an election, and upon notice to the persons declared elected thereat. The supreme court will hear the proofs and allegations of the parties, and confirm the election, order a new election, or take such other action as justice may require.
“In addition, the shareholder may also have causes of action against the board for breach of contract and breach of fiduciary duty.”