Cooperatives & Condominiums

In creditor's action to set aside an assignment of the right to purchase a co-op apartment at an insider's price, assignees appealed from Supreme Court's award of judgment to creditor. The Appellate Division reversed and granted summary judgment to assignees, holding that assignment was not fraudulent.

The building in which the subject apartment is located was converted to co-operative ownership in 1981. At that time, the current occupants of the apartment did not purchase he apartment, so the shares were allocated to the sponsor. In 1990, the occupant, Vera, brought a declaratory judgment action against the sponsor and the co-op board, seeking to enforce a contract to purchase the apartment at an insider's price. The board objected to the sale because of Vera's failure to provide information about her financial stability. The parties entered into a settlement agreement by the terms of which Vera assigned all of her rights in the contract to her niece's husband. A few months later, creditors obtained judgment against Vera in the amount of $400,000. That judgment has not been satisfied. Creditors then sought to set aside the assignment of contract rights as a fraudulent conveyance. Supreme Court granted judgment to the creditors, and the assignee appealed.