Bad-Faith Actions

Biondi v. Beekman Hill House Apt. Corp.

This case involved a board member having his request for indemnification from the apartment corporation denied for damages arising out of a federal court case entitled Broome v. Biondi, where a jury found that he, along with several other directors, had discriminated against prospective subtenants. Finding that Biondi acted in bad faith, the New york Court of appeals held that, under such circumstances, indemnification is void against public policy

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"The area where boards are most often exposed to legal challenges is in the admissions process. If this process is not conducted in good faith or is tainted by discrimination, boards and board members can lose the protection of the Business Judgment Rule as well as their director and officers insurance coverage. With17 protected classes of individuals in New York City, boards need to adopt an admissions policy and interview protocol that will not place the corporation or board members at risk."

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