Bad Faith and Unequal Treatment
Board action taken outside the scope of its authority, in bad faith, or not in furtherance of a legitimate corporate purpose — the narrow opening the business judgment rule leaves.
NEW YORK
No agency has jurisdiction
A plenary action against a deferential standard of review. Most such suits fail, which is itself the finding.
2 verified cases — 0 against a board, 1 for a board, 1 split, 0 open. No clean finding of liability against a board in this bucket.
What the board is said to have done
Treated a shareholder differently from others in the building, in concert with the managing company and three individual board members.
A tribunal rejected this claim.
Board prevailed — merits not decided; allegation, not a finding
What the board is said to have done
Adopted house rules said to single out individual shareholders rather than apply to the building generally, including a rule governing parking spaces.
No tribunal ever decided this.
Split decision — merits not decided; allegation, not a finding