Adam Leitman Bailey, P.C. Saves Large Cooperative Building From Having Entire Election Overturned and New Board of Directors Instated
Disgruntled shareholders in cooperatives can go to great lengths to challenge the decision-making of the board of directors. In one of Adam Leitman Bailey, P.C’s latest cases, a shareholder, whose intention was to put his own team of individuals on the board, brought a proceeding in Supreme Court to overturn the latest election. The shareholder asserted several allegations of electoral fraud and conspiracy, despite the fact that an independent election committee certified the election as fair.
Adam Leitman Bailey, P.C. immediately went to work, understanding how high the stakes were. Overturning an election with over 1,500 shareholders would be extremely costly for the cooperative. Adam Leitman Bailey, P.C. attorneys cleverly waged a two-pronged attack against the shareholders’ claims. First, the shareholder’s claims were factually incorrect and unsubstantiated and did not support overturning the election. To this end, the attorneys investigated the shareholder’s claims, met with the election company, reviewed the results and mathematically proved the results were accurate. Second, the shareholder’s petition failed as a matter of law. In proving so, Adam Leitman Bailey, P.C. picked up a nuance in the statute on which the shareholder’s petition was based: the petition must be brought in the name of the shareholder individually. Here, the shareholder brought his petition in the name of a non-profit organization. As a result, the petition held no water to challenge the results of the election.
At oral argument, Adam Leitman Bailey, P.C. presented the arguments to the judge quickly and efficiently, demonstrating that the petition must be dismissed independently on these grounds. After giving the shareholder the chance to plead his case, the judge was not persuaded. The judge issued his decision from the bench, resting on the arguments made by Adam Leitman Bailey, P.C. at oral argument and its papers. Adam Leitman Bailey, P.C. prevailed, and saved the client tens of thousands of dollars in doing so.
Jeffrey R. Metz represented the prevailing party, the cooperative board of directors, in this matter.