Proxy Fights: Stories from the Trenches

If you've ever served on your board, you may, unfortunately, be no stranger to proxy skirmishes, proxy wars or in some cases even proxy apathy. Draconian proxy rules, unscrupulous board members, vicious lawsuits, too few or too many proxies — these are just some of the challenges board members have encountered at meetings that require voting.
We asked expert attorneys, managers and board members to relate their firsthand experiences dealing with the power of the proxy. Here are their stories.
Article index
- Proxy-Fight Stories
- Proxy-Fight Stories: Attorneys
- Proxy-Fight Stories: Attorneys, Part II
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BOARD MEMBERS & MANAGING AGENTS
Paul Hachmeyer
Treasurer, 7201 Owners Corp.
86 units
Bay Ridge, Brooklyn
We had a situation several years back in which a board member was trying to hold onto his seat. He solicited several proxies from owners unable to attend the meeting. However, some of the proxies were not originals but were faxed to him, and initially the individual running the election did not want to accept the faxed proxies. Things got a little heated. The board decided to accept them under the condition that they would be verified after the election if the voting were close. Since board member candidates are usually in short supply, it turned out that there were no new candidates nominated, and the existing board remained in place. We learned that one needs to use common sense when dealing with modern technology and with bylaws that are over 20 years old.
Marianne Ciccantelli
Property Management
Kenilworth Equities
We recently had a problem where candidates used mock proxies for their campaign in an attempt to get people involved and to get votes. Candidates went door-to-door prior to the election with blank proxies, and the result was that shareholders gave out multiple proxies! Of course, many of those votes had to be voided. I strongly recommend the use of a ballot company for larger buildings, particularly when the election is controversial.
David Wineberg
President, The Franconia
150 units
Central Park West, Manhattan
We haven't had an issue that required a super-majority since we revised the proprietary lease. But I'll tell you, just getting people to a general meeting is … an effort. The proxies are critical. We spend more time in the newsletters, in pieces from me and from the managing agent … exhorting people to attend, saying, "Just let us hold the meeting legally. We're very, very close to not having enough proxies." Every year, the sponsor sells off more units so he has less of a block to throw our way.
We campaign for proxies every year. … I will put out a newsletter, as I do quarterly. I will ask the owners to return their proxies after they have been distributed. Then we'll distribute the proxies a few weeks later, and then the managing agent will send another letter asking people to please return the proxies, and then I'll send another letter saying, "Please, if you're not going to come, send your proxy." So, we're going to hit them up a number of times. So far, that's been good enough. They can sign them off to someone who's going to be there.
It's all about communication. … The more people know, the more cooperation you'll get.
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