Q&A: No Election, No Quorum?

What happens when there is no quorum at a shareholders meeting and therefore there is no election for new board members? The same board has remained in my co-op for many, many years without a chance for us to vote them out. Isn't there a law against this?

—Quorum Quandary

“Shareholders can call for a special meeting to have an election of directors where a cooperative board has failed to hold an annual meeting or where a board has called for an annual meeting, but where no quorum has been established.” says attorney Jeffrey S. Reich, a partner with New York-based law firm Wolf Haldenstein Adler Freeman & Herz LLP.

“Section 603 of the New York Business Corporation Law provides that if, for a period that is thirteen months from the last election, there is a failure to elect a sufficient number of directors to conduct the business of the corporation, the board shall call a special meeting for the election of directors. Section 603 goes on further to provide that if such a meeting is not called by the board within two weeks after the expiration of the thirteen month period or if such a meeting is called but there is a failure to elect the necessary number of directors at that meeting for a period of two months thereafter, shareholders representing 10 percent of the total shares of the corporation may demand the calling of a special meeting for the election of directors and no quorum requirements shall apply to such a meeting. Thus, Section 603 provides the letter writer with the recourse that he seeks and empowers the shareholder (along with a few fellow shareholders) to compel the election of directors that he seeks.”

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4 Comments

  • Our board has tried twice to do elections and both times "something happened were the ballots were not honored. I suspect something fishy. The previous board directors stood down. By default a person took seat as president but is a bully. How can this be?
  • this happens because the attorney general office refuses to uphold the NYS laws. Since there are zero shareholder only lawyers,We do not have proper representation.. All of these co-op lawyers work primary for the sponsor/board managing company
  • For the last three years my board has not had an honest election. The only time u see them is at the annual meeting where the same people stayed on the board because they said a quorum was reached’ . This year I was ready to challenge them because the two people that were on the board was running again with no openings for anyone else. They had their crooked lawyer and board members spoke ... but if you wanted to speak you were quickly shut down. It finally came no quorum was reached. Now, a notice was sent that the two would be staying because no quorum was reached. What are the rules for this bad behavior.?
  • The board in our building has for at least three years stayed on because of "no quorum." How is it then legal for this board to decide what can and cannot be done in the building, including raising the maintenance?