Governor Andrew Cuomo has signed a new law that will allow cooperative shareholders to attend annual meetings, and to vote, from remote locations via “computer hookups.” With many co-ops struggling to achieve a “quorum” -- a minimum number of shareholders required to make a meeting valid -- this new legislation allows for more members to participate, even though they are not physically present.
Prior to this change to the Business Corporation Law (BCL), cooperatives were forced to amend their bylaws in order to allow shareholders to participate from other locations.
“Since the amendment was made only to the BCL and not the Real Property Law, it does not apply to condominiums,” reads Habitat Magazine. “However, condo unit-owners can implement such a change by voting to amend their governing documents.”
Many are leery of this electronic attendance format. Marc Schneider, a managing partner at Schneider Buchel, says that he doesn’t think “all co-ops are going to want to stream their annual meetings. When you have a sensitive subject you want to discuss at the annual meeting, a co-op might want to confine that discussion to the room where the meeting is being held.”
Schneider also believes that the old-fashioned, in-person meeting is “the safer option.”
“When you use electronic media, you may think you’ve authenticated the person, but there may be ways for someone to get around it,” Schneider said. “The only way to be 100% certain is the be face to face.”
“This could potentially be a dangerous move,” noted Jarred Kassenoff, a partner at Newman Ferrara LLP. “Transmissions may not only be intercepted by unauthorized parties, but there is potential for an array of abuses, including the recordation or digital preservation of these transmissions, without the Board’s, or participating shareholders,' consent,” he added. “We see a lot of contentious litigation ahead, and shareholders will have our political leaders to thank for that.”
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To view the original story, please use this link: https://www.habitatmag.com/Publication-Content/Board-Operations/2019/2019-November/Electronic-Attendance-and-Voting-Now-Legal-in-Co-op-Annual-Meetings
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