13315 Owners Corp. v. Kennedy, 4 Misc. 3d 931 (2004)

Citation: 13315 Owners Corp. v. Kennedy, 4 Misc. 3d 931 (2004)
Parent Document: 13315 Owners Corp. v. Kennedy, 4 Misc. 3d 931 (2004)
Jurisdiction: New York (state)
Effective Date: 2004-06-29
Original Source: https://www.courtlistener.com/opinion/6305035/13315-owners-corp-v-kennedy/ ↗

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Petitioner does not dispute these facts. Petitioner argues, instead, that a board’s improper election cannot be raised in a holdover proceeding. Ordinarily, petitioner would be correct; improper election of the board is an inappropriate defense in a competent-evidence case. As petitioner notes, the cooperative’s board can continue to function under the Business Corporation Law even though the shareholders did not elect it in accordance with its bylaws. Business Corporation Law § 602 (b) provides that the “failure to hold the annual meeting on the date so fixed or to elect a sufficient number of directors to conduct the business of the corporation shall not work a forfeiture or give cause for dissolution of the corporation.” Business Corporation Law § 603 (a) provides an exclusive remedy to a shareholder aggrieved by the failure to hold annual elections. An aggrieved shareholder along with “holders of ten percent of the votes of the shares entitled to vote in an election of directors may, in writing, demand the call of a special meeting for the election of *948directors specifying the date and month thereof.” (Business Corporation Law § 603 [a].) Had respondent wished to object to the failure to hold annual elections, he should have done so shortly after the failed election meetings of August 5, 2002 or May 14, 2003.

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