37140 Goddard Street - Romulus, MI 48174 - 734-955-9516




Dear Co-op Counselor; HELP!

Dear Counselor;
Can you help me with a issue our cooperative is having with confidentially? How do you hold a board member accountable when you know that they are discussing cooperative business with others whom should not be subject to privileged information?
Signed: Passionate about Privacy

Dear PAP:
Many Co-ops solve this problem by requiring Directors to sign confidentiality agreements and if reached, they must resign and in some instances terminate their membership. This may require an amendment to the Bylaws. Absent that, it may be necessary for the Board to adopt a resolution of censorship and distribute it to the Membership so as to inform them of the infraction. In most cases, the Board cannot remove a Director so by informing the Membership, it sets the stage for calling a special meeting of the Members to consider removal. Other options include the extreme measure of simply refusing to allow the offending Director to have access to confidential information or participating in closed session, or seeking judicial redress on the theory of breach of fiduciary responsibility. Since these are all fact-specific situations, you should consult with your Co-op Attorney to determine which strategy is best given your circumstances.

Randall Pentiuk, Esq.

While we hope this information is helpful in answering some of your questions, please be advised that the answers provided here are for “general” informational purposes only. This information should not
be construed as “legal advice” either to the individual or the Cooperative that they represent, the use of this forum does not create an attorney-client relationship between the user/reader and Mr. Pentiuk or his law firm, Pentiuk, Couvreur and Kobiljak, P.C. For specific legal advice and personalized assistance with regard to your particular issue or problem you should contact a professional cooperative attorney