OWNERS OF COOPERATIVE and condominium
apartments have the right to bring derivative actions against their
boards. Simply put, derivative actions allow a shareholder to
sue on behalf of a corporation. But under what circumstances
and with what notice? That is one issue addressed in a recent
decision, Avramides v. Moussa.
Michael Avramides owned a co-op apartment at 319 East 50th
Street. He began an action "derivatively" on behalf of
the cooperative, alleging that the individual board members were
responsible for improper repairs to the roof and terraces of the
building. (There had been prior lawsuits involving Avramides
and the co-op.)
The case raises an important aspect of derivative actions. In a
co-op, as in all corporations, a derivative action is a creature of
statute. The statute allows a shareholder to start a lawsuit, but
he or she has to give the board an opportunity to begin an action
itself. The shareholder has to tell the board, in effect,
"This is
