Legal Fees and Garage Lease Issues
According to the Coop's CPA firm, Marin & Montanye, having the garage lease would reduce Shareholders' maintenance by $659 per 100 shares owned, per year. Regarding the 80/20 rule, our CPAs have affirmed that no coop they audit has ever broken that rate by accident, nor has there been trouble with the IRS. This is the CPA firm chosen when Ken Newman and Steve Hanley were on the board, and it has 200 coop clients. Newsletter #141 provided much detail about the subject, and Shareholders also requested a summary explanation. Regarding Ken Newman's demand for legal fees of $270,000 - fees are often reduced by the judge. The building spent $75,000. The coop's bank officer has offered a credit line of $500,000, at 6%, should the larger amount be necessary. If we need to borrow $ 100,000, this translates to $35 per year per 100 shares if only repaying the interest; or $164 per year per 100 shares if repaying principal over 4 years, some of which is tax deductible. The board doesn't not want to throw anybody's money away, and even the worst possible scenario does not make the building bankrupt. Finally, Ken Newman owes the building $114,000, so even if the $270,000 was ever finalized, it would still be reduced by $114,000.