I've seen multiple claims that if a co-op building lets the proprietary lease expire, then shares in the corporation become worthless (even if the corporation owns the building and land outright, without a mortgage). For example:
when the proprietary lease expires, the co-op corporation will cease to exist, and the shares in the corporation (i.e. the mortgage collateral) will have zero value
Why does the corporation not have value even if the shareholders cannot occupy the building? How can you just dissolve a corporation that owns a significant asset like a New York apartment building without first liquidating the asset to pay off creditors and shareholders? Who owns a building after the proprietary lease expires and what am I missing about co-op structures?
I know it's highly unlikely that a co-op would allow its proprietary lease to expire, since the lessor and lessee are literally the same people, but this question is not about the likelihood of that happening. I want to understand the consequences of a proprietary lease expiring as a proxy for my understanding what co-op shares truly represent.
