Mitchell-Lama Co-op Seeks Privatization
LVT Number: #24474
Landlord, a limited-profit housing company operating a low- to moderate-income Mitchell-Lama development, filed an Article 78 court proceeding to compel HPD to approve its plan to privatize the development, and to compel the State Attorney General to accept for filing its privatized cooperative offering plan. Tenant organizations intervened with objections. The court and appeals court ruled against landlord, who then appealed to New York's highest court. The Court of Appeals again ruled against landlord. The proposed privatization was a public "offering or sale" of securities, within the meaning of the Martin Act, so landlord must first file an offering statement with the Attorney General. In addition, the Business Corporation Law didn't require a per-share formula for the tenant-shareholder vote on the plan to withdraw from Mitchell-Lama. The vote must be counted on a per-apartment basis.
East Midtown Plaza Housing Company, Inc. v. Cuomo: NY Slip Op 07848, 2012 WL 5833959 (Ct. App.; 11/19/12; Graffeo, J, Lippman, CJ, Ciparick, Read, Smith, Pigott, JJ [concurring])