Illinois objectors who skipped the Section 15 process lost their case on causation
Illinois objectors who skipped the Section 15 process lost their case on causation
2026-09-10 · Illinois · Courts
What happened. On October 15, 2025 the Illinois Appellate Court, Third District, issued its order in Kai v. Board of Directors of Spring Hill Building 6 Condominium Ass'n, Inc., 2025 IL App (3d) 240277-U. It is a Rule 23 order and is not precedential, and it carried a dissent. The Illinois Supreme Court denied leave to appeal on January 28, 2026, No. 132496.1
The allegation was serious: board members who were also principals of the purchasing entity in a Section 15 forced bulk sale did not disclose their interest in the buyer, or a 2016 appraisal.
What the court accepted
Two things, and both are favourable to owners.
Board members owe fiduciary duties under 765 ILCS 605/18.4. And — quoting the earlier Kai, 2020 IL App (2d) 190642 — “nothing in section 15 supplants board members' common law duty to act as unit owners' fiduciaries.”
So a Section 15 sale is not a fiduciary-free zone, and self-interest must be disclosed. That is the law.
Why the plaintiff lost anyway
On proximate cause, not on the propriety of the conduct.
The disclosure failures could not have caused her loss because she and every co-plaintiff voted against the sale anyway. Knowing more would not have changed a vote already cast in opposition.
The court then identified what did cause the loss: “[i]t was ultimately [plaintiff's] failure to act under Section 15 that actually and proximately caused her damages.” Every objector who followed the Section 15(b) appraisal and objection procedure received more than the original offer.
The court alternatively affirmed on avoidable consequences and failure to mitigate. The dissent would have found triable issues.
The operational rule for owners, and it is unforgiving
If you believe a bulk sale is corrupt, you must still perfect your Section 15 rights — file the written objection within the statutory window and demand the appraisal. Skipping the statutory remedy and going straight to a fiduciary-duty suit loses on causation, and it loses even where the underlying conduct was exactly what you alleged.
This is counterintuitive, which is why it is worth stating twice. The instinct of an owner who believes the process was rigged is to refuse to participate in it. That instinct forfeits the remedy.
What it means for boards
Read the two halves in the right order. Your fiduciary duty in a Section 15 sale is intact, and an interest in the purchasing entity must be disclosed. The board here survived on causation — which is luck, not compliance.
Change any of the facts and the outcome changes. Had a plaintiff voted in favour and then discovered the board's interest in the buyer, the causation defence evaporates. Had a plaintiff objected properly and been shortchanged in the appraisal, the same. The holding is narrow and it protects a narrow class of defendants.
Read alongside the other side of the deal
The two Illinois deconversion decisions of this period point in the same direction from opposite ends. In 540 North Lake Shore the First District held the association cannot sue over bid-suppression tactics, and cannot represent owners once they have sold. Here the Third District holds an owner who does not use the statutory process cannot sue either.
Between them, the message to Illinois owners in a bulk sale is that the protection is the statute's own machinery — the objection, the appraisal panel, the payment floor — and that machinery has deadlines.
A note on duration
This litigation ran four appeals over seven years. Anyone weighing a challenge to a completed bulk sale should factor that in against the appraisal remedy, which resolved in the objectors' favour without any of it.
What to watch next
Nothing further in this case — the Supreme Court denied leave on January 28, 2026. The open question is whether an owner who did vote in favour, in reliance on incomplete disclosure, can make out causation. No Illinois court has decided that, and we are not going to guess at it.
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