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No SubjectMar 17, 2007


As a board member we have entered into line of credit of over 1 Million $$. I have been denied a copy of the loan documentation. I was told that If I need to review it I would have to go to either the lawyer's office or the managing agent's office. At this point in time I have no knowledge, neither does any one else on the board, with the exception of two members, as to the terms, rate, penalties for non payment,etc. What to do. Please advise.


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Papers, all papers - Ted-NJ Mar 18, 2007


Let me categorically state that as a board member in my co-op I have access to anything and everything, except the waiting list for parking spaces. Why no view into the waiting list of parking spaces? Because parking is a sensitive issue and as board members we stay out of the way and never influence a resident’s position on the list.

Other than the above, we have access to everything.

By the way, we have a line of credit and every board member is aware of the terms of the line and when we draw down and when we repay it. In point of fact, we always repay the line of credit within our financial fiscal year and never carry a balance to the new fiscal year.

So in this case, suggest the following:
1. Phone call to the president.
2. Letter to the president copy to all board members.
3. Letter to the co-op attorney.
4. Letter to the holder of the directors and officers insurance, copy to the co-op attorney.



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l.o.c. - steve w Mar 18, 2007


I agree with the Ted that you should first speak with the board pres to ask (again) for a copy of the loan agreement. If he/she says no, write a letter to the board pres, stating his/her previous refusal, and asking again to see the documents -- and cc the entire board, managing agent (and his/her boss), and the corp atty.

Our board recently increase its line of credit, and to do so the board had to vote in favor of it. Unless your l.o.c. was acquired without board approval, I can see no reason why the information should be withheld from the entire board. (And if it was acquired without board approval, well, then you definitely need to get the lawyer involved.)

Remember, too, that the board's attorney works for the ENTIRE board, not just the president. The board's atty, therefore, cannot withhold a corp document if a majority of the members ask for it.

-- a board treasurer


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Re: l.o.c. - Anonymous Mar 19, 2007


This is precisely what the lawyer has told me that I must get approval from the majority. In my case this will never happen as the majority will say no. What do I do then. I still maintain that I do not need board approval to get copies of documentation ehich we are all entitled to see. The latest objection from the secretary was that "her signature is all over these documents & I would forge her signature as I had done before in trying to access her business accounts". Of course this is false. Another issue with her at the moment.


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non-functioning board - steve w Mar 19, 2007


There's the crux of the issue: a nonfunctioning board. If the secretary feels free to state that you have committed felonious fraud (which, I believe, is called "libel per se" and may be strong enough to sue over if she says it publicly), you have a board that cannot function.

I'm beginning to think that perhaps you should cut your losses and resign -- and not because the other members won't play fair.

If they won't let the board see this agreement, I wonder what else they're trying to get away with. Even assuming they're doing nothing illegal, any breach of fiduciary duty committed by a few members applies to all (I'm no lawyer; this is my interpretation). You don't want to be dragged down by something you fought against.

If I felt my board was not open, fair or acting on behalf of ALL shareholders, I seriously consider resigning. (This happened to my mother, when she served on a non-profit board (not a co-op); too many hints of impropriety and her lawyer advised her to resign in writing and destroy her personal notes.)

Good luck.


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Serious board problem - BP Mar 20, 2007


No board director should operate unilaterally or have power over any other director. Opinions will vary and "majority prevails" - but a majority can't refuse you access to what all directors are entitled. A board is a team of equals. The pres/secretary have certain specific duties, but if you are flatly denied the right to see/approve documents, know how an LOC/other finances are handled or have legitimate questions answered, your coop has a serious problem.

I disagree that you should resign. IF you can support your position as a fair, honest board director and are denied the right to act in that capacity, you do your coop a great disservice by walking away. The problem continues, maybe gets worse, and everyone may suffer consequences.

If coop matters are being mishandled and you get nowhere with the pres/secretary, manager or attorney, take this to the people who can effect change: the shareholders. Present the facts at an open meeting...ask questions and don't let the pres/secretary/attorney brush them off...encourage others to speak, get involved, run for the board. You will stir things up, but you can't avoid it if you want to get the board and the coop back on the right track.

If possible, get non-divisive board directors to stand with you and don't let emotions rule. Work with the shareholders and do it responsibly and professionally.

Problems don't go away if people who can help resolve them go away. You joined the board to improve your coop and to make a positive difference, didn't you? From what you've said, it doesn't sound like you will have a better chance to do that than now.




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Board Problems (to BP) - V Mar 21, 2007


Very well said!


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Re: Papers, all papers - o Mar 19, 2007


I have put my request for a copy in writing to President & all board members. The objections came from Secretary & president which are the only board members privileged to see these loan documents, although 2 minutes before the end of a board meeting I was passed the 200 page document to review. When I said I would have to copy it & or view it at my leisure, I was told NO.

I have written the attorney as well but no answer. By the way I do not expect an answer from the attorney as I have written him before in other issues & in speaking with him I was told that If the board does not give approval, I cannot see documentation. To further clarify, I have written our lawyer about 70,000 missing in our accounts & to date no response.


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lLoan documents - V Mar 18, 2007


Why not go to the managing agent and view the documents? I feel something fishy is going on when a board member can't get copies of documents pertaining to the building they represent. Keep the pressure on! Don't give up.


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