BlueSKy

Members may sue directors for waste in paying themselves fees

Members may sue directors for waste in paying themselves fees

Members may sue directors for waste in paying themselves fees

A trial court in New York City has allowed members of a nonprofit housing cooperative to sue directors of the corporation for breach of fiduciary duty and corporate waste after the directors took fees for providing services to the organization. The dissident members charged that a husband and wife couple, serving as president and vice president of the coop, had improperly obtained control over the organization, and had put two daughters and a close personal friend on the board of directors. No election of directors had taken place for more than 20 years prior to an election in 2008, and the members claimed that the election in 2008 was marred by intimidation and participation by individuals...

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