East End Realtors association challenges proposed merger with larger, island-wide group

A proposed merger between the Hamptons and North Fork Realtors Association and the Long Island Board of Realtors has prompted a lawsuit alleging that the larger organization worked with two HANFRA insiders to advance an unauthorized takeover.

LIBOR disputes the claims, arguing that the case stems from an internal HANFRA leadership struggle and that the merger never occurred.

At the heart of the lawsuit is a struggle over who controls the East End’s independent Realtor association and whether it will remain an alternative to LIBOR. Plaintiffs contend the proposed merger would give the larger island-wide group HANFRA’s membership, chartered territory and multiple listing service subsidiary, eliminating a competitor for members and dues and foreclosing the revival of an independent East End listing service.

HANFRA, founded in 1996, serves real estate professionals in the five East End towns through member services, education and advocacy. LIBOR, founded in 1910, reports more than 27,000 members across Queens, Nassau and Suffolk counties. HANFRA had 275 members in August, according to the complaint.

The lawsuit was brought by Tahir Baig, a Westhampton Beach-based real estate agent, who asserts that he remains HANFRA’s president, and the association against LIBOR, Michael Coughlin and Horace Barrow. Coughlin’s position as chief staff executive and Barrow’s authority within HANFRA are disputed.

The complaint alleges that Coughlin and Barrow pursued the merger without proper board authorization and treated a membership vote as approval even though, plaintiffs contend, it did not meet the required threshold. Plaintiffs also challenge a proposed $19,500 payment from LIBOR to Coughlin for salary and office expenses, alleging that it gave him a personal financial interest in the transaction.

Coughlin maintains that members approved the merger and disputes Baig’s authority to act for HANFRA, according to the court’s summary of his response.

Suffolk County Supreme Court Justice Paul Hennings on Oct. 8 granted limited protections for HANFRA’s records, electronic accounts and funds. The order restrains Coughlin and people acting with him from destroying records, disabling account access or making specified transfers of association funds.

Hennings left unresolved who is entitled to control the association. He reserved decision on requests to turn over records and credentials and transfer exclusive administrative and financial control, finding that more evidence was needed about the validity of the disputed board actions and who currently holds the materials.

An evidentiary hearing is scheduled for Nov.12 at the courthouse in Riverhead.

In an Oct. 7 letter requesting a conference before an anticipated dismissal motion, LIBOR attorney Michael Schoenberg argued that LIBOR negotiated with people publicly identified as HANFRA’s leadership and published financial information supplied by HANFRA. He said the complaint failed to establish legally sufficient claims against LIBOR.

Plaintiffs’ attorney Bruce Kaplan disputed LIBOR’s characterization in an unfiled response provided to RiverheadLOCAL. He argued that the absence of a completed merger did not resolve the alleged wrongdoing.

“Correct: the members rejected it. That is Plaintiffs’ case, not LIBOR’s defense,” Kaplan wrote.

Kaplan also alleged that LIBOR published financial information covered by a confidentiality agreement. He said plaintiffs intend to seek permission to add a breach-of-contract claim.

Schoenberg did not respond to a request for comment.

The lawsuit seeks to invalidate the merger proceeding, resolve HANFRA’s leadership dispute and recover damages. The Oct. 8 ruling did not determine the validity of the merger vote or resolve the claims against LIBOR.

A separate stipulation between the parties extended LIBOR’s deadline to answer the complaint to Oct. 23.