A Mount Vernon man who was elected to the board of directors of Vernon Manor Co-Operative Apartments is suing the corporation for financial records and to override his removal from the board.
Keith Chisolm petitioned Westchester Supreme Court on July 6 to compel the Co-op to permit inspection of financial records, stop the board of directors from interfering with his duties, and award him $100,000.
He claims he was removed from the board for the purpose of “silencing dissent and disabling an internal whistleblower.”
Vernon Manor consists of four 6-story apartment building on East Lincoln Avenue that were built in 1952.
Chisolm claims that the corporation has been “plagued by financial mismanagement and near insolvency for years,” including inflated maintenance charges and allegations of kickbacks with vendors and misappropriation of funds.
Last September, he demanded access to six years of general ledgers, bank statements, tax returns, budgets and other records.
He claims the corporation demanded thousands of dollars in payments to produce the records, and would not allow him to inspect the records with an attorney.
According to emails submitted as exhibits in the lawsuit, the corporation’s attorney, Ian J. Brandt, said residents who own shares in the corporation may inspect records held by an outside management company. But shareholders do not have a right to unfettered access to all records, they must submit a “good faith affidavit” to inspect them, and for some records they must show a court why they are needed for inspection.
Board members, on the other hand, have a right to all books and records, Brandt stated, but the corporation can challenge a board member for “bad faith.”
Chisolm was elected to the board this past December and he was designated as a vice president. Still, he claims, the co-op has refused to produce the records.
Board president Mabel Acosta has falsely accused him of stealing a $24,000 check, according to the lawsuit, ordered him to leave closed-door executive sessions, stated that fraud and perjury charges would be filed against him, and disabled his official email account.
On March 26, Acosta notified Chisolm’s attorney by email that he “is no longer serving as vice president or in any other capacity on the board of Vernon Manor Cooperative Apartments.” He was welcome to the information he has requested but he would have to pay the management company thousands of dollars to retrieve records.
Chisolm says his removal bypassed corporation bylaws that require written charges, a petition signed by 5% of the shareholders, ten days written notice, and a vote by three-fourths of the shareholders who attend a meeting to remove a director.
He is asking the court to compel the corporation to let him inspect the records for free, while accompanied by his lawyer or a professional advisor; to declare that he remains a duly elected director and stop the corporation from excluding him from meetings and disabling his email account; and to award him legal fees “given that bad faith was the driving force behind the board’s denials.”
Acosta did not reply to an email asking for the corporation’s side of the story.
