Q&A: Something to Hide

Q We are having a major problem with our board president and vice-president. We  have a seven member board, in which one of the directors has asked to see a  list of bills paid to date and other board inquires. He was told that he is not  entitled to this information because he is a director and not an officer, and  that they could not give this information to them by orders of the board  president and vice president. I have been on past boards of this co-op, and I know for a fact that they cannot  do this. Our vice president and board president are hiding things from the rest  of the board and the shareholders, so the other board members are afraid that  what they are hiding may harm our 50+ community.  

 —Seeking the Truth  

A “The objection to the dissemination of financial information to another board  member by the president and/or vice president would be well founded if the  co-op were located in some third world nation,” says Abbey Goldstein, a partner at the Queens law firm of Goldstein & Greenlaw, LLP. “Fundamental to the operation of any co-op or condominium is the requirement that  there be access to financial information—not only for board members, who need this information in order to properly  fulfill their fiduciary obligation, but to shareholders as well, who have the  right to verify that the administration of their co-op, in all respects,  legitimate and free of impropriety.  

 “While, pursuant to standard bylaws, the president would have authority to act  unilaterally with regard to certain of the day-to-day operations of the co-op,  this discretion does not include the suppression of financial, or any other,  information regarding the co-op. Such stonewalling exceeds his or her  authority.  

 “From the manner in which you present the issue, it would appear that a majority  of the board is opposed to the high-handed activity of the president and  vice-president. That being the case, it is easy to depose them. While board  members, typically, can only be removed by a vote of the shareholders, the  office held by a board member can be taken away by a simple majority vote of  the board of directors. It sounds as if the time has come for a coup.”  


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