(CN) – Shareholders in a cooperative corporation were allowed to sell shares without obtaining consent, a New York appeals court ruled.
A class of shareholders in Netherland Gardens Corp., led by Aaron Mittman, was found to be holders of unsold shares. The First Department appellate panel ruled that the class members qualified as shareholders as part of an offering plan when they purchased property. The shares maintained their unsold status because an apartment was never lived in by the buyer for a bona fide occupancy.
Netherland Gardens argued that the property purchasers and shareholders never amended the offering plan or received shareholder status from the sponsor, who did not promise payment of maintenance charges and assessments due from the apartment, according to the ruling. But the offering plan does not specify that failing to comply with these provisions strips holders of unsold shares of their shareholder status.
The five-judge panel affirmed judgment in favor of the shareholding class.