In Marine Midland Bank v. White Oak Coop. Hous. Corp. (1997 WL 34823122 [Sup Ct, Westchester County 1997]), the occupancy agreement gave the cooperative a 60-day option period within which to purchase the shareholder's common stock and occupancy agreement, when a shareholder notified the cooperative of an intention to leave the cooperative.
The occupancy agreement provided that the shareholder could sell the stock "to any person" if the cooperative corporation did not exercise its option within the 60-day period (id.).
It also provided that the shareholder could sell "to any person" if the option was waived.
The Court held that "the requirement by the cooperative corporation that plaintiff must sell its shares at a price set by it to be approved is an unreasonable restraint on alienation. Such a restriction can effectively prevent plaintiff from ever selling its shares as the price set may bear no reasonable correlation to market value" (id.).
The court also noted that the restriction was especially untenable considering that the shareholder was still liable for maintenance charges.