Bad math equals no sale. That’s what an acting state Supreme Court justice ruled Monday when she rejected the National Council of Young Israel’s request to sell its six-story headquarters in Manhattan’s Flatiron District building to a condominium developer for $5.4 million.
Debra James said NCYI did not properly count the votes from its board of directors meeting when NCYI officers approved the sale at a Nov. 14, 2002 board meeting.
Therefore, the judge declined to approve the building sale, as is required under New York State law when religious corporations seek to sell their assets.
The decision was hailed by attorneys for the Young Israel of Fifth Avenue, a congregation located on the bottom floors of the West 16th Street building for the past 59 years. YIFA has been battling its parent NCYI over the sale both in secular court and religious court (bet din), contending it would force the demise of the shul.
"However the national council may choose to spin this decision, their petition to the court to approve the sale was dismissed," attorney Joel Cohen, a synagogue member, told The Jewish Week Wednesday.
Cohen, of the firm Stroock & Stroock & Lavan, and colleague Michele Pahmer have been representing YIFA pro bono.
"What [the decision] certainly means at the moment is they can’t sell the building," Pahmer added.
But Kenneth Fisher, who represents NCYI, dismissed James’ concerns over the counting of board votes as a technical matter that is easily remedied.
"Any technical glitches can easily be resolved, and we look forward to consummating the sale of the property," said Fisher, of the firm Phillips Nizer.
Further, Fisher noted that James rejected YIFA’s contention that it has an ownership interest in the sale of the building and denied its request to see NCYI financial records.
"We are gratified that the court dismissed YIFA’s claim of ownership and found that its rights are no greater than any of our other approximately 140 member synagogue branches," he said.
Regarding the ruling on the board votes, Fisher said James erroneously double counted 12 board members to reach a total of 36 members instead of the 24 NCYI claims it has.
"If you look at the list of officers, you see they are also members of the board, and the judge counted them twice," Fisher said. "That’s a simple matter to clear up."
James ruled that under Not-for-Profit Corporation Law, the sale must be authorized by a majority of NCYI’s entire board, which she calculated as 36 members.
So, she said, the 13 board votes approving the sale did not meet that requirement. Further, James rejected four yes votes because they were cast by telephone, which is unacceptable. So her calculation is that only nine members approved the sale when 19 are necessary.
By NCYI’s calculation, only 13 votes are needed to approve the sale based on a 24-member board.
Fisher said the phone votes were "customary" but acknowledged they are not authorized under the law.
He said NCYI would decide as early as this week whether to go back to James asking for relief or to hold another vote.
Because of the vote issue, James said she would not rule on the substantive issues in the case: whether the sale would violate NCYI’s mission to promote synagogues.
NCYI claims the building sale is necessary for the future financial viability of the Orthodox group.
James said the state attorney general’s approval of the sale is conditioned on "the deposit by the National Council of $4 million of the proceeds of the sale into funds which may not be expended without further approval of the court unless to satisfy [NCYI’s] debts or obligations to the New York State Department of Health arising out of its operation of its Shalom Nursing Home" in Westchester.
The judge noted that NCYI still refuses to participate in a bet din requested by YIFA to resolve the religious question about whether it is kosher for NCYI to put a functioning synagogue out of business.
NCYI says the Bet Din of America does not have standing to hear the case and its own rabbinic court, the Vaad, is the proper forum for the case.