Opinion ID: 781725
Heading Depth: 2
Heading Rank: 3

Heading: The numerator

Text: 43 The Cooperative argues that the Lomantos and Iwanczuks are developers within the meaning of Section 3607(b), requiring that their units be aggregated with those of the Sponsor in order to determine the first moment at which the Sponsor held 25% or less of the total units. If the numerator is so calculated, the termination window did not open before November 5, 1988, and the July 19, 2000, termination letter was timely. As we previously noted, Section 3603(14) defines developer as 44 (A) any person who offers to sell or sells his interest in a cooperative or condominium unit not previously conveyed, or (B) any successor of such person who offers to sell or sells his interests in units in a cooperative or condominium project and who has the authority to exercise special developer control in the project including the right to: add, convert, or withdraw real estate from the cooperative or condominium project, and maintain sales offices, management offices and rental units; exercise easements through common elements for the purpose of making improvements within the cooperative or condominium; or exercise control of the owners' association. 45 Because the Iwanczuks' and Lomantos' units were conveyed to them by the Sponsor, the two couples do not fall within clause (A). We must consider, however, whether they are successors to the Sponsor under clause (B). 46 Being a successor within the meaning of the statute requires more than simply succeed[ing] the original developer in time. Darnet Realty Assocs., LLC, v. 136 E. 56th St. Owners, Inc., 214 F.3d 79, 85 (2d Cir.2000) (quoting 136 E. 56th St. Owners, Inc., v. Darnet Realty Assocs. LLC, 1999 WL 47328, at  (S.D.N.Y. Feb.1, 1999)). In addition to temporal succession, the putative successor must either be the original developer's alter ego [or] be expected for any other reason to share the original developer's interest in the self-dealing lease. Id. 47 Neither the Iwanczuks nor the Lomantos have an interest in the lease that differs from the interest of other shareholders. If terminating the lease would benefit the other shareholders economically, it also would benefit the Iwanczuks and Lomantos. Thus, the two couples do not have an economic interest that is allied with the Sponsor's. Nevertheless, the cooperative contends that the district court should have found a sufficient affinity of interest based on a combination of several factors. First, the Sponsor produced both couples, designated them as holders of unsold shares, and guaranteed their obligations. Second, neither couple voted in favor of termination. Third, Mrs. Lomanto's livelihood was dependent on the good will of the sponsor's principal and Mrs. Iwanczuk's livelihood was dependent on the good will of the sponsor's attorney and landlord. 48 We do not find a sufficient identity of interest between the Iwanczuks and the Sponsor. Mrs. Iwanczuk's status as a former employee of the Sponsor's former attorney, who also is the landlord of the Sponsor's liquidating partner is too attenuated, as a matter of law, to count the Iwanczuks as developers. See Darnet, 214 F.3d at 85 (holding that where neither alter ego status nor shared interest exists, statutory policy does not support continued tolling). 49 Because the cooperative concedes that if the number of units is set at the time the cooperative is created, it must establish that both the Iwanczuks and Lomantos are developers, we need not address the more difficult issue of the Lomantos' status. See Appellants Brief at 49-50. The sponsor owned less than 25% of the units in the project as of October 16, 1997, and the cooperative's July 19, 2000, notice was untimely.