What happens when a coop corporation goes bankrupt? Does it happen? How would it affect someone as a shareholder? Does he lose his shares?

Asked by wenyeung, Forest Hills, NY Sun Sep 16, 2012

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Ron Cohen’s answer
Ron Cohen, , Forest Hills, NY
Sat Sep 22, 2012
It's rare but it happens. When buying a co-op you buy shares of stock in a corporation that owns a building. If that corporation declares bankrupcy, the value of your shares may become worthless. This does not mean you lose your shares or your right to live there since you still have a lease. Most co-ops facing bankruptcy will restructure, and continue on. Always be sure to do your homework before making any purchase. Good Realtors, lenders, and attorneys can help ensure that your purchase is secure and stable.
0 votes
M.kamra, Home Buyer, Union City, NJ
Tue Apr 30, 2013
I am looking to buy a coop unit and they supplied a financial statement for only 22010 and 2011 but not for 2012 .The existing mortgage for the coop is coming due in May.2013 and they have not given us any information if they have approval for new mortgage and their terms and conditions .Should I be concern
about it ora go ahead to purchase the unit .

0 votes
Jacques Ambr…, Agent, Forest Hills, NY
Sun Sep 16, 2012
It's very rare, but make sure your attorney reviews the financials of any building you plan to purchase in. Otherwise you as the shareholder along with your fellow shareholders may have to foot the bill
0 votes
Anna M Brocco, Agent, Williston Park, NY
Sun Sep 16, 2012
The question can best be answered by an attorney who specializes in real estate, therefore consider a consultation. One possibility is losing the value of any shares, thus becoming a renter...again consult with an attorney.
0 votes
Fajardo Dela…, Agent, Flushing, NY
Sun Sep 16, 2012
wenyeung,If the Corporation defaults on loans, all the assets of it
may be liquadated to pay the creditor any extra would
be distributed to the stockholders. Your "ownership" of
the Co op and right to live there would quickly be lost.
0 votes
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