Co-Op’s Board of Directors’ Termination of Proprietary Lease Upheld—Business Judgment Rule—Co-Op Boards Are Not Required to Inform Shareholders That They Have a Right to Have Counsel Present at a Board Meeting—Proprietary Lease Terminated Based on Objectionable Conduct—RPAPL 711 “‘Competent Evidence’ Standard is Satisfied by Utilization of the Business Judgment Rule”
A cooperative corporation (co-op) had commenced a holdover proceeding against the respondents and undertenants pursuant to a board of directors (board) decision “which terminated respondents’ proprietary lease” (lease) based upon “objectionable conduct.” The co-op alleged that since 2005 “occupants and guests of [the premises] have engaged in…objectionable conduct including but not limited to violation of both the House Rules and [lease],” and “have created a nuisance by repeated conduct after numerous letter[s], creating an unhealthy and unsafe environment for the other residents….”
