In 1998, defendant M 1015 G.C. purchased all the unsold co-operative shares in defendant 1015 Concourse Owners Corp., amounting to some 80% of outstanding shares, from the sponsor's designated successor. M 1015 was itself never designated a holder of unsold shares or successor to the sponsor. Consistent with provisions in the offering plan and amendments, plaintiffs, who were tenant shareholders of most of the remaining 20% of the co-op, brought this action to compel M 1015 to, inter alia, sell the unsold shares and turn over majority control of the co-op's board of directors.
At least since 1991, the Attorney General, as promulgator of the regulations governing formation and administration of coops in New York, has taken the position that a bulk purchaser of unsold shares "will be deemed to be a sponsor." ( See also 13 NYCRR 18.3 [c] [2], promulgated in November 2006, providing that if a sponsor "makes a bulk sale of all or some of its unsold shares, the transferee is bound by [the] sponsor's representation regarding its commitment to sell units as they become vacant.") The Attorney General's rational interpretation of regulations promulgated by his office is entitled to deference ( see Dunlop Dev. Corp. v Spitzer, 26 AD3d 180, 181). Since M 1015 indisputably acquired 80% of the co-op's shares in a bulk purchase from the sponsor's successor, it is deemed a sponsor, and thus bound by the sponsor's obligations. Furthermore, the co-op's offering plan and proprietary lease make clear that M 1015 is in fact a holder of unsold shares ( see Kralik v 239 E. 79th St. Owners Corp., 5 NY3d 54, 59), even though it was never formally designated as such and has never complied with regulations governing holders of unsold shares.
Plaintiffs have shown a likelihood of success on the merits, irreparable injury in the form of potential destruction of their co-operative lifestyle, and a balancing of the equities in their favor. We have considered defendants' remaining arguments and find them unavailing.