Board president Gary Altman still has not delivered on a promise to give a full accounting of the coop’s legal expenses for dog litigation and the federal discrimination suit settled earlier this year.
Legal fees have skyrocketed for the past four years due to legal action initiated by the coop. Last year, Altman admitted that $575,000 had been spent in the 2013-14 fiscal year on legal expenses related to dog litigation. He said he “expected that our insurance company will reimburse the Corporation for a substantial portion of this amount,” but in February’s board newsletter, that insurance claim was revealed to be only $195,000. Furthermore, these announced expenses predate most of the work relating to the federal lawsuit, which occurred in the 2014-15 fiscal year, and do not include expenses from previous years, when the coop started to incur unusually high legal fees.
Cooperator Tommy Loeb, who raised the question at last year’s annual meeting and has pressed Altman in the months since for an answer, sent another letter yesterday requesting a full accounting of these expenses.
From 2011 through June 30, 2014, “legal and audit” expenses have increased 462%, costing the coop an additional $1.2 million. Legal costs in the 15 months since have not been revealed at all. Furthermore, despite substantial interest from cooperators in a more reasonable pet policy, the board has made no move alter its policy or legal strategy, meaning these legal costs could continue to climb.
Here is the letter sent to Mr. Altman:
Dear Mr. Altman,
I am contacting you regarding my August 10, 2015 letter requesting a full accounting of expenses on the pet litigation. I have enclosed a copy of the letter. When we met at the Coastal Resiliency Planning meeting on September 10 you told me a letter was being prepared by a lawyer to respond to my inquiry and I would receive it shortly.
I have also enclosed a copy of “The Board Room” newsletter of July 2015 where you did not provide accurate financial information based on your previous replies to this question. Is it true that the coop only spent $85,000 on dog litigation as you represented in the letter? I also enclosed a copy of your March 2014 memo where you indicate that the pet litigation will seriously effect coop finances and may result in a maintenance increase.
I would like to remind you that you have an obligation to accurately report and inform the more than 1600 East River Cooperators of the finances of East River Housing.
It has now been 30 days since you said I would get a reply. If I do not receive a reply by November 1 you will leave me no alternative but to contact the New York State Attorney General which I held off doing given your commitment to a reply.
The Attorney General has jurisdiction to guarantee the Cooperative Boards uphold their fiduciary responsibility and honestly report the financial position of the coop. I will ask him to intervene to get us the information we deserve if you continue to withhold this information.