Sunday, April 10, 2016
STERLING LAUREL REALTY, LLC, ET AL. VS. LAUREL GARDENS CO-OP, INC., ET AL. A-0696-14T4
STERLING LAUREL REALTY, LLC, ET AL. VS. LAUREL GARDENS CO-OP, INC., ET AL.
The central issue in this case is whether defendant Co-Op's Board of Directors could amend the bylaw definition of a quorum (for purposes of shareholder meetings) from a majority of the shareholders to twenty percent of the shareholders. We hold the New Jersey Business Corporation Act (the Act), N.J.S.A. 14A:1-1 to 17-18, precludes the Board from unilaterally reducing the Co-Op's shareholder-quorum requirement. We conclude N.J.S.A. 14A:5-9 makes clear that an amendment to a corporation's bylaws is insufficient to supplant the default majority quorum requirement set forth in the Act; only an amendment to the certificate of incorporation — which can only be approved by a vote of the shareholders, see N.J.S.A. 14A:9-2(4) — could legally alter the Co-Op's shareholder-quorum requirement.