In Sassi-Lehner v. Charlton Tenants Corp. , Christina Sassi-Lehner wanted a court to declare her the holder of unsold shares in a cooperative corporation and that she could "assign, sell or transfer the shares without board approval.
Charlton Tenants Corp. owned a six-story residential apartment building. In 1982, when the cooperative was formed, the non-purchasing, rent-controlled tenants living in apartment 4C declined to purchase their unit and the shares attributable to the apartment took on "unsold" status and were retained by the sponsor. Three years later, Mark Greenbaum acquired the shares (as reflected in amendments to the cooperative's offering plan). He later defaulted on his mortgage, and the shares were sold by the Federal National Mortgage Association ("Fannie Mae") to Michael and Christina Sassi.
In 2001, when Michael died, the shares were transferred to his daughters, Christina Sassi-Lehner and Gabriella Sassi-Hill. However, after Greenbaum, none of the subsequent shareholders were identified in any amendments to the cooperative's offering plan. When the tenants of 4C stopped paying rent and surrendered possession, the Sassis sought to sell the unit, but Charlton Tenants Corp. wouldn't permit the sale unless the Sassi sisters complied with the co-op's rules governing such transfers
Because they were never officially designated "holders of unsold shares," the New York County Supreme Court concluded the ladies couldn't claim such status. On appeal, the duo contended that the offering plan wasn't controlling and the certificate of incorporation, the bylaws, and proprietary lease were of critical importance. They argued that, according to the lease, "the person owning the shares has all the rights of a holder of unsold shares until such time as he or she occupies the apartment or the shares are owned by a purchaser who occupies the apartment." Because the Sassis never lived in the unit, they claimed to be owners of "unsold shares."
Since who was a "holder of the unsold shares" was determined by the offering plan (and its amendments), and Greenbaum was the last person cited in those documents, the Appellate Division, First Department, found the sisters weren't exempt from complying with the co-op's procedures.
Now, wasn't that sassy?
To download a copy of the Appellate Division's decision, please use this link: Sassi-Lehner v. Charlton Tenants Corp.