The treasurer of a Berkeley, California, senior housing cooperative announced on 28 January that the co-op had spent or lost more than $224,000 as the result of an ongoing lawsuit.
Berkeley Town House, a 60-unit building, has been involved in the suit for nearly three years. In the suit, I am the plaintiff, and 8 former co-op officials are the principal defendants. The essence of the suit is my complaint that the defendants (1) illegally wasted about a quarter-million dollars of corporate funds, which they owe back to the corporation, (2) recklessly ignored warnings of possible seismic weaknesses in the co-op building, and (3) perpetrated massive violations of legally guaranteed shareholder rights. The co-op’s insurance company has provided attorneys to defend the defendants, and also to represent the co-op, from the time the complaint was filed.
If the insurance company is paying for attorneys for the defendants and the co-op, what accounts for the co-op having incurred almost a quarter-million dollars in out-of-pocket costs? I wish I could tell you, but I can’t, because the basic facts about the co-op’s expenses—whom has it paid, when, how much, and for what—have been kept secret. Five of the co-op’s members asked to see those facts in March 2013. Nearly two years later, we are still waiting, even though state law obligates such corporations to disclose that kind of information in at most 30 days. We have received a small sample of what we asked for, but most of the time period remains an information vacuum.
Bottom line: The co-op’s officials were sued for (among other things) wasting a quarter-million dollars and keeping illegal secrets. How have they and their successors responded? By doing the same thing again, raising the waste to nearly half a million and keeping their shareholders still in the dark about how and why their money is spent.