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1
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OPINION
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EXTRACTED KEY WORDS
SHARES PLAINTIFFS CONTRACT NY2D OFFERING PLAN COOPERATIVES COMPLAINT APPELLATE DIVISION TENANTS APARTMENTS DISMISS APPEALING YORK CPLR ASSERTING EFFECTUATING ALLEGE CONVERSIONS CO-OP BOARD MAJORITY AFFIRM SELL MOTION PURCHASE GBL DEFENDANTS BREACH REAL ESTATE PARTY |
1 No. 68
511 West 232nd Owners Corp., et al.,
Respondents,
v.
Jennifer Realty Co., &c., et al.,
Appellants.
_________________________________________________________________
2002 NY Int. 72
June 11, 2002
This opinion is uncorrected and subject to revision before publication
in the New York Reports.
Mark N. Axinn, for appellants.
Beatrice Lesser, for respondents.
Community Housing Improvement Program, Inc. et al.; Real Estate Board
of New York, Inc.; Council of New York Cooperatives and Condominiums;
Eliot Spitzer, Attorney General of the State of New York, amici curiæ.
_________________________________________________________________
ROSENBLATT, J.:
Pursuant to the Martin Act (General Business Law article 23-a), the
owner of an apartment building may sponsor an Offering Plan to convert
the building into a cooperative. Such conversions are subject to a
complex statutory and regulatory scheme that governs the form and
content of public offerings, public disclosure, advertising and
criteria for determining when such a conversion becomes
effective.(1) On this appeal, plaintiffs (the board of directors of
the cooperative corporation and a number of individual shareholders
and proprietary lessees) allege that the sponsor breached its
contracts with them by retaining most of the shares in the cooperative
after the effective date of the conversion. The central question
before us is whether plaintiffs have sufficiently pleaded a cause of
action for breach of contract. We conclude that they have.
The complaint recites that in 1974, defendant Arthur Wiener acquired
the subject 66-unit rent-regulated apartment building located at 511
West 232nd Street in The Bronx and transferred it to co-defendant
Jennifer Realty Co., a partnership in which Wiener and his named
co-defendants are principals. (We refer to defendants collectively as
the sponsor.) Having obtained permission from the Attorney General in
1987 to convert to a cooperatively-owned building under a non-eviction
plan,(2) the sponsor began accepting offers for shares. After
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