Post by leokeeler on Jun 27, 2016 8:39:29 GMT -7
On April 11th, the Board passed a resolution to change the interest rate on past due assessments from 18% to 12%. That resolution stated "Pending approval of the GLA attorney, I move that we set the interest rate we’re charging on the delinquent accounts at 12% and we do not umm institute the 5% umm penalty.
I am seeking to see the documented attorney approval that is required to make this, and the new rule shown in the Newsletter, legally complete.
My request has been denied (see the reply below) using misdirecting tactics, which I responded to with the letter below. Sorry it is so long but there are lots of problems with the way the Board is handling attorney input.
To: GLA Board of Directors; Glastonbury Landowners For Positive Change
The history of my requests to simply see the entire official record of the motion and the attorney approval required by the motion pertaining to Covenant 11.06 and voted on by the Board on April 11th is becoming quite long. I do not understand why it is so difficult to obtain the attorney approval, which legally must be part of the actual resolution that was passed on April 11th, if that resolution is to be made whole. No response to multiple document requests for months, then a letter from the Communication Committee that asserts attorney-client privilege and directs me to incomplete and inaccurate minutes (per the voice recording of the meeting) does not confuse me, but supports the fear there is no such approval from the attorney.
I am attaching another document request to this letter, and presenting that the Board is in violation of numerous Bylaws, Covenants and State law. Specifically Bylaw Article VI(B)(1), Article XI (c), Covenant 2.02, Covenant 2.05, State statutes 35-2-906 (1) and 35-906(5)(c) are being violated. If acting under Covenant 12.01, the Board is exceeding the purpose and intent of that covenant to address individual situations. Presenting the “rule” in the newsletter as a fact without requesting Member comment, as was done for the Collections Policy and Project Application Instructions in the next article, is deceptive at best. A final problem is the Board use of minutes to record resolutions is faulty when the minutes do not quote the actual resolution, but present portions out of context.
As stated in the request, I desire to see if the GLA attorney approval of the resolution of April 11th has been obtained in a form that is part of the official GLA records and makes the resolution complete. If that resolution has been terminated, I wish to see the resolution that terminated it. The reply states “After getting attorney input” making that input critical to the voting process and thus must be clearly documented.
The first paragraph of the reply asks me to believe that just “by their nature” all communications with an attorney are “attorney-client privileged information.” The reply goes on to say the “board may release information that they deem of general interest to the members of the Association.” The actual motion for an interim change of the interest rate of Covenant 11.06 included the requirement for GLA attorney approval, which is what I am seeking. That is a critical element of the resolution. It cannot be held separate from the resolution and withheld from Member requests for resolutions made under State law 35-906(5) (c). What I seek is not an item of general interest and withholding it is nonsensical.
The second paragraph referring me to the minutes of the May 16th meeting does not fulfill my request pertaining to the resolution of April 11th. It appears the motions of April 11th, May 16 and attorney approvals are all joined and dependent upon each other. That is demonstrated in the reply statement “As you may recall the Board vote of April 11th included the step of attorney approval. After getting attorney input, the Board voted to create the Rule that went out for landowner review. It is all part of the same process. The Board is able to vote at closed meetings. The vote was to create the rule and put it out for landowner input. Only after the 30 day period can it be voted on and enacted.” Everything being part of the same process depicts the resolution of April 11th, and attorney approval both were used to support the vote of May 16th to establish a Rule and publish it in the Newsletter. The reply stating“After getting attorney input,” rather than after getting attorney approval indicates that approval has truly been given.
There are problems with the publishing that rule as a fact, and not for Member comment or questioning. The Board is violating Bylaw Article VI(B)(1), Article XI (c), Covenant 2.02, and Covenant 2.05. Not providing me the attorney approval portion of the resolution of April 11th addressing the group of landowners late in paying their assessments, also places the Board in violation of 35-2-906(5)(c).
I do not believe the attempt to define the resolution of April 11th as a Rule is an act of enforcement, as it is now being called, is legal. The entire Board was sent the letter from Jon Hesse informing the Board that rule making cannot be used to change a covenant, nor can enforcement, which applies to actions toward individuals. Publishing the Rule in the Newsletter and saying it is for enforcement was actually a display of the Board violating Covenants and the Bylaws. Since a request for comments from Members has never been made the reply stating “The vote was to create the rule and put it out for landowner input” is false.
The minutes of the meeting of April 11th are inaccurate, incomplete, and create doubts about all the minutes of the Board. Those inaccuracies prevent the minutes of Board meetings from fulfilling a request for the actual resolutions in their entirety. The motion made and recorded on April 11th was: “Dan; Yeah, I can make a motion, “Pending approval of the GLA attorney, I move that we set the interest rate we’re charging on the delinquent accounts at 12% and we do not umm institute the 5% umm penalty. And we charge simple interest.” Dennis Riley asked “And this is for an interim period until there is a vote, and we change the covenants? Dan replied Yeah.” The minutes do not quote the motions but state: 5.8.1.3 “Dan advised that the board needed to choose among the worded passages below.” Motion: Rudy motioned and Dan seconded to accept this wording of “12% or the highest interest rate the law will allow.” Discussion included the idea of going as high as 15%; that 15% might be seen as to high; that 12% was recommended by the attorney. Motion carried unanimously.”
The approved minutes of the April 11th Board meeting are neither complete nor accurate as required by State law There is no reference in the minutes of the required attorney approval or dropping the 5% penalty. That omission makes the minutes incomplete at best and places all Directors approving the minutes with incomplete or inaccurate presentations of what they voted on in jeopardy.
Referring me or any other Member requesting copies of resolutions to look to the minutes to answer our questions does not fulfill the Board’s legal requirements under State law. Especially, when as above, the minutes do not accurately present the actual motion that was made and voted on and the minutes do not contain all documents required to be attached to a resolution. In legal documents and legal actions, every word has specific meaning and nothing can be left out of legally required transcripts. The actual Resolutions, and supporting documentation they require (if any), must be provided when requested by a Member presenting a valid purpose, such as verifying actions required before a resolution is legal have been done.
The response I received contains another attempted misdirection by pointing toward more problems the Board is creating. The meeting minutes of May 16th do not even discuss the attorney approval documentation I am seeking, which is required to make the April 11th resolution legally useful. At 9.2 the May 16th minutes present “The board wrote a rule to enforce the intent of covenant 11.06 within MT statures until such time as the membership would vote to amend Covenant 11.06: The association will charge 12% simple interest or the highest rate the law will allow and no 5% penalty.” Motion Charlene Motioned and Dennis seconded to approve the above written rule. Motion carried unanimously.” As presented in the minutes, there is no way to determine if this motion repealed the motion of April 11th , was joined with and became part of the resolution of April 11th ( i.e. making the April 11th motion the “rule”), or if this motion and rule stand alone in contradiction with the April 11th motion by not requiring or mentioning attorney approval.
The State of Montana is empowering Members by requiring corporations to keep records of and provide the resolutions by a Board to the members. It allows us to discover exactly what a Board does, and holds Directors responsible for their actions. Providing inaccurate and/or incomplete minutes as a substitution for providing the actual resolutions does not fulfill the Boards’ responsibilities to me and other Members. Because the April 11th minutes do not state the actual motion, the minutes of the May 16th meeting are incomplete and the attorney approval is not provided, my request the Associations records on the resolutions pertaining to changing the interest rate in 11.06 is still unfulfilled.
The Board remains in violation of the following three statutes: 1) 35-2-906 (1)” any of the records of the corporation described in 35-2-907(1) a member is entitled to inspect and copy, at a reasonable time and location specified by the corporation, any of the records of the corporation described in 35-2-906(5) if the member gives the corporation written notice or a written demand at least 5 business days; 2) 35-2-906(5) (5) A corporation shall keep a copy of the following records at its principal office or a location from which the records may be recovered within 2 business days: and 3) my specific request being under 35-906(5)(c) resolutions adopted by its board of directors relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members; (i.e. assessments as obligations and a group of debtors due to late assessments).
The reply using the statement “The Board is attempting to follow state law to enforce the intent of the covenant, which discretion is allowed the Board by both state law and the covenants.” is very dubious at best. Enforcement here entails collecting assessments from individuals as required in Covenant 11.06. Presenting the Boards actions as “attempting to follow state law to enforce the intent of the covenant” and “after getting attorney input, the Board voted to create the Rule” is stating the attorney did approve of the motion passed on April 11th, or gave approval of the May 16th motion. If attorney approval was not given for the April 11th motion but was given for the May 16th motion, that approval must also be part of the official records. Both motions address the same issue and board powers thus making the attorney approval part of either resolution a requirement. If that is untrue or I am misconstruing this part of the reply, and/or the attorney advice, the issue can be quickly resolved by providing the required attorney approval for either motion.
The reply points to yet another action of the Board that is violating the Bylaws and trying to conceal that vote before receiving Landowner input with the statement “Only after the 30 day period can it be voted on an enacted “fails. The Board voting to establish the rule in a closed session, before any notification or input by Members violates Article XI (c), Article “Prior to making any new Rules or Regulations, or taking any action to enforce any of the Covenants, …… the Association, acting through the Board shall provide reasonable written notice ….. (30 days), to all Members (in the case of rule making) … and a reasonable opportunity for any such Member to be heard and to give written or oral comment to the Board of Directors .“ The minutes may again be incomplete or inaccurate, but they join with the Newsletter in showing that the Board acted without following Article II (c) with the statement “the Board creates the following Rule until such time as the membership votes to amend Covenant 11.06.” This notification stands alone, is presented as a completed action and contains no mention of seeking Member input. The very next article of the Newsletter confirms the Board violation of the Bylaws. It is titled “Enclosures for 30-Day Review. It presents the Collection Policy and Project Review Instructions and clearly asks for Member input with the statement “If you have any comments or suggestions about these proposed changes, please contact the Gla board by June 25th via phone, email or postal mail” on only those two items. No mention is made about commenting on the Rule. The only evidence the Board is seeking input is within the reply I received which states “The vote was to create the rule and put it out for landowner input. Only after the 30 day period can it be voted on and enacted.” I, and possibly a few others, know enough to send in comments, but that cannot be expected of all Landowners.
This rule, if enacted, will also violate Article VI(B)(1) which states: “Adopt Rules and Regulations from time to time for the conduct of the affairs of the Association and the enjoyment of the Members, provided that no Rule or Regulations so adopted shall be in conflict with Montana law, the Covenants, the Articles of Incorporation or these Bylaws, and provided further that no Rule or Regulation shall be so construed so as to impair in any manner the lien of any mortgage or deed of trust with respect to any of the property if such Rule or Regulation is promulgated after the recordation of said mortgage or deed of trust.” The Rule is in conflict with both Covenant 11.06 and 2.05 and it establishes an interest rate that impairs liens by reducing the amount owed that would be shown on the lien.
The reply references the May 31, 2016 ruling by Judge Cybulski to “bear out, Boards of corporations all over Montana have the responsibility to interpret their governing documents to the best of their ability. They cannot exercise complete abandon of the documents, but act to fulfill them.” Acting to fulfill a covenant does not equate to changing the requirements of the covenant. In addition, having read that decision, I do not find it pertinent to my request for the attorney approval document. I am not questioning the Board abandoning our governing documents as the reply suggests I may be doing. I am just asking to get a copy of the attorney approval. If the intent is to rely upon Judge Cybulski’s decision which references board powers to make interpretations under the bylaws, the Board must understand their powers under the Covenants differ greatly and the Judge referencing the Covenants is something I do find included in the decision. Bylaw Article XII (A) states: “The Board shall have the power to interpret all the provisions of these Bylaws and such interpretation shall be binding on all persons …” Covenant 2.02 states: “Additional Force and Effect. In addition, each provision in this Declaration shall also be interpreted in the light of its express language, context and intent …” Though the Board may have broad power under the Bylaws, everyone making an interpretation of any Covenant is required to adhere to Covenant 2.02.
My reference to fiduciary responsibilities is not related to the Association making a profit, and I do not know why that is injected into the reply. Covenant 11.06 stating 12%, 15% or 18% and the collecting any of those amounts will serve the same purpose and have the same benefit or impact to the Association. None of them are considered as a profit for the Association. Referring to how the interest is seen, i.e. making a profit is not “up to the perception viewing it” but is a decision made by the IRS. In addition, I am not questioning whether the interest rate is a “de facto penalty.” That decision was made by the creators of the Covenants, can only be amended by a vote of the Members, and is not available for interpretation by the Board.
The reply closed with a reference to “partners” as I used it in my June 5th document request. I referenced 35-2-418(4) “For purposes of this section, a director of the corporation has an indirect interest in a transaction if: (a) another entity in which the director has a material interest or in which the director is a general partner is a party to the transaction.” I have not yet searched for court cases that define partners. However, tithing members of Church Universal and Triumphant are all contributing specified amounts to support the Church, which establishes a material interest and/or makes them general partners. In addition, the Church is a formal church with sacred rituals, inner temple teachings, defined levels of membership or position (Communicant, Keeper of the Flame, etc.,) members judging or influencing advancement and punishment of other members, and there being known repercussions for actions not approved by the Church, that all must be considered. Directors that are Church members are financially depending on other Church members, and in the common definition of partners, have a conflict of interest if they are involved in granting waivers or reducing interest rates for other Church members. We may have to agree to disagree on this matter, but I hope all Directors consider the risks they take if they become involved in approving interest rates lower than that voted on by Landowners for other Church members.
Leo Keele
I am seeking to see the documented attorney approval that is required to make this, and the new rule shown in the Newsletter, legally complete.
My request has been denied (see the reply below) using misdirecting tactics, which I responded to with the letter below. Sorry it is so long but there are lots of problems with the way the Board is handling attorney input.
To: GLA Board of Directors; Glastonbury Landowners For Positive Change
The history of my requests to simply see the entire official record of the motion and the attorney approval required by the motion pertaining to Covenant 11.06 and voted on by the Board on April 11th is becoming quite long. I do not understand why it is so difficult to obtain the attorney approval, which legally must be part of the actual resolution that was passed on April 11th, if that resolution is to be made whole. No response to multiple document requests for months, then a letter from the Communication Committee that asserts attorney-client privilege and directs me to incomplete and inaccurate minutes (per the voice recording of the meeting) does not confuse me, but supports the fear there is no such approval from the attorney.
I am attaching another document request to this letter, and presenting that the Board is in violation of numerous Bylaws, Covenants and State law. Specifically Bylaw Article VI(B)(1), Article XI (c), Covenant 2.02, Covenant 2.05, State statutes 35-2-906 (1) and 35-906(5)(c) are being violated. If acting under Covenant 12.01, the Board is exceeding the purpose and intent of that covenant to address individual situations. Presenting the “rule” in the newsletter as a fact without requesting Member comment, as was done for the Collections Policy and Project Application Instructions in the next article, is deceptive at best. A final problem is the Board use of minutes to record resolutions is faulty when the minutes do not quote the actual resolution, but present portions out of context.
As stated in the request, I desire to see if the GLA attorney approval of the resolution of April 11th has been obtained in a form that is part of the official GLA records and makes the resolution complete. If that resolution has been terminated, I wish to see the resolution that terminated it. The reply states “After getting attorney input” making that input critical to the voting process and thus must be clearly documented.
The first paragraph of the reply asks me to believe that just “by their nature” all communications with an attorney are “attorney-client privileged information.” The reply goes on to say the “board may release information that they deem of general interest to the members of the Association.” The actual motion for an interim change of the interest rate of Covenant 11.06 included the requirement for GLA attorney approval, which is what I am seeking. That is a critical element of the resolution. It cannot be held separate from the resolution and withheld from Member requests for resolutions made under State law 35-906(5) (c). What I seek is not an item of general interest and withholding it is nonsensical.
The second paragraph referring me to the minutes of the May 16th meeting does not fulfill my request pertaining to the resolution of April 11th. It appears the motions of April 11th, May 16 and attorney approvals are all joined and dependent upon each other. That is demonstrated in the reply statement “As you may recall the Board vote of April 11th included the step of attorney approval. After getting attorney input, the Board voted to create the Rule that went out for landowner review. It is all part of the same process. The Board is able to vote at closed meetings. The vote was to create the rule and put it out for landowner input. Only after the 30 day period can it be voted on and enacted.” Everything being part of the same process depicts the resolution of April 11th, and attorney approval both were used to support the vote of May 16th to establish a Rule and publish it in the Newsletter. The reply stating“After getting attorney input,” rather than after getting attorney approval indicates that approval has truly been given.
There are problems with the publishing that rule as a fact, and not for Member comment or questioning. The Board is violating Bylaw Article VI(B)(1), Article XI (c), Covenant 2.02, and Covenant 2.05. Not providing me the attorney approval portion of the resolution of April 11th addressing the group of landowners late in paying their assessments, also places the Board in violation of 35-2-906(5)(c).
I do not believe the attempt to define the resolution of April 11th as a Rule is an act of enforcement, as it is now being called, is legal. The entire Board was sent the letter from Jon Hesse informing the Board that rule making cannot be used to change a covenant, nor can enforcement, which applies to actions toward individuals. Publishing the Rule in the Newsletter and saying it is for enforcement was actually a display of the Board violating Covenants and the Bylaws. Since a request for comments from Members has never been made the reply stating “The vote was to create the rule and put it out for landowner input” is false.
The minutes of the meeting of April 11th are inaccurate, incomplete, and create doubts about all the minutes of the Board. Those inaccuracies prevent the minutes of Board meetings from fulfilling a request for the actual resolutions in their entirety. The motion made and recorded on April 11th was: “Dan; Yeah, I can make a motion, “Pending approval of the GLA attorney, I move that we set the interest rate we’re charging on the delinquent accounts at 12% and we do not umm institute the 5% umm penalty. And we charge simple interest.” Dennis Riley asked “And this is for an interim period until there is a vote, and we change the covenants? Dan replied Yeah.” The minutes do not quote the motions but state: 5.8.1.3 “Dan advised that the board needed to choose among the worded passages below.” Motion: Rudy motioned and Dan seconded to accept this wording of “12% or the highest interest rate the law will allow.” Discussion included the idea of going as high as 15%; that 15% might be seen as to high; that 12% was recommended by the attorney. Motion carried unanimously.”
The approved minutes of the April 11th Board meeting are neither complete nor accurate as required by State law There is no reference in the minutes of the required attorney approval or dropping the 5% penalty. That omission makes the minutes incomplete at best and places all Directors approving the minutes with incomplete or inaccurate presentations of what they voted on in jeopardy.
Referring me or any other Member requesting copies of resolutions to look to the minutes to answer our questions does not fulfill the Board’s legal requirements under State law. Especially, when as above, the minutes do not accurately present the actual motion that was made and voted on and the minutes do not contain all documents required to be attached to a resolution. In legal documents and legal actions, every word has specific meaning and nothing can be left out of legally required transcripts. The actual Resolutions, and supporting documentation they require (if any), must be provided when requested by a Member presenting a valid purpose, such as verifying actions required before a resolution is legal have been done.
The response I received contains another attempted misdirection by pointing toward more problems the Board is creating. The meeting minutes of May 16th do not even discuss the attorney approval documentation I am seeking, which is required to make the April 11th resolution legally useful. At 9.2 the May 16th minutes present “The board wrote a rule to enforce the intent of covenant 11.06 within MT statures until such time as the membership would vote to amend Covenant 11.06: The association will charge 12% simple interest or the highest rate the law will allow and no 5% penalty.” Motion Charlene Motioned and Dennis seconded to approve the above written rule. Motion carried unanimously.” As presented in the minutes, there is no way to determine if this motion repealed the motion of April 11th , was joined with and became part of the resolution of April 11th ( i.e. making the April 11th motion the “rule”), or if this motion and rule stand alone in contradiction with the April 11th motion by not requiring or mentioning attorney approval.
The State of Montana is empowering Members by requiring corporations to keep records of and provide the resolutions by a Board to the members. It allows us to discover exactly what a Board does, and holds Directors responsible for their actions. Providing inaccurate and/or incomplete minutes as a substitution for providing the actual resolutions does not fulfill the Boards’ responsibilities to me and other Members. Because the April 11th minutes do not state the actual motion, the minutes of the May 16th meeting are incomplete and the attorney approval is not provided, my request the Associations records on the resolutions pertaining to changing the interest rate in 11.06 is still unfulfilled.
The Board remains in violation of the following three statutes: 1) 35-2-906 (1)” any of the records of the corporation described in 35-2-907(1) a member is entitled to inspect and copy, at a reasonable time and location specified by the corporation, any of the records of the corporation described in 35-2-906(5) if the member gives the corporation written notice or a written demand at least 5 business days; 2) 35-2-906(5) (5) A corporation shall keep a copy of the following records at its principal office or a location from which the records may be recovered within 2 business days: and 3) my specific request being under 35-906(5)(c) resolutions adopted by its board of directors relating to the characteristics, qualifications, rights, limitations, and obligations of members or any class or category of members; (i.e. assessments as obligations and a group of debtors due to late assessments).
The reply using the statement “The Board is attempting to follow state law to enforce the intent of the covenant, which discretion is allowed the Board by both state law and the covenants.” is very dubious at best. Enforcement here entails collecting assessments from individuals as required in Covenant 11.06. Presenting the Boards actions as “attempting to follow state law to enforce the intent of the covenant” and “after getting attorney input, the Board voted to create the Rule” is stating the attorney did approve of the motion passed on April 11th, or gave approval of the May 16th motion. If attorney approval was not given for the April 11th motion but was given for the May 16th motion, that approval must also be part of the official records. Both motions address the same issue and board powers thus making the attorney approval part of either resolution a requirement. If that is untrue or I am misconstruing this part of the reply, and/or the attorney advice, the issue can be quickly resolved by providing the required attorney approval for either motion.
The reply points to yet another action of the Board that is violating the Bylaws and trying to conceal that vote before receiving Landowner input with the statement “Only after the 30 day period can it be voted on an enacted “fails. The Board voting to establish the rule in a closed session, before any notification or input by Members violates Article XI (c), Article “Prior to making any new Rules or Regulations, or taking any action to enforce any of the Covenants, …… the Association, acting through the Board shall provide reasonable written notice ….. (30 days), to all Members (in the case of rule making) … and a reasonable opportunity for any such Member to be heard and to give written or oral comment to the Board of Directors .“ The minutes may again be incomplete or inaccurate, but they join with the Newsletter in showing that the Board acted without following Article II (c) with the statement “the Board creates the following Rule until such time as the membership votes to amend Covenant 11.06.” This notification stands alone, is presented as a completed action and contains no mention of seeking Member input. The very next article of the Newsletter confirms the Board violation of the Bylaws. It is titled “Enclosures for 30-Day Review. It presents the Collection Policy and Project Review Instructions and clearly asks for Member input with the statement “If you have any comments or suggestions about these proposed changes, please contact the Gla board by June 25th via phone, email or postal mail” on only those two items. No mention is made about commenting on the Rule. The only evidence the Board is seeking input is within the reply I received which states “The vote was to create the rule and put it out for landowner input. Only after the 30 day period can it be voted on and enacted.” I, and possibly a few others, know enough to send in comments, but that cannot be expected of all Landowners.
This rule, if enacted, will also violate Article VI(B)(1) which states: “Adopt Rules and Regulations from time to time for the conduct of the affairs of the Association and the enjoyment of the Members, provided that no Rule or Regulations so adopted shall be in conflict with Montana law, the Covenants, the Articles of Incorporation or these Bylaws, and provided further that no Rule or Regulation shall be so construed so as to impair in any manner the lien of any mortgage or deed of trust with respect to any of the property if such Rule or Regulation is promulgated after the recordation of said mortgage or deed of trust.” The Rule is in conflict with both Covenant 11.06 and 2.05 and it establishes an interest rate that impairs liens by reducing the amount owed that would be shown on the lien.
The reply references the May 31, 2016 ruling by Judge Cybulski to “bear out, Boards of corporations all over Montana have the responsibility to interpret their governing documents to the best of their ability. They cannot exercise complete abandon of the documents, but act to fulfill them.” Acting to fulfill a covenant does not equate to changing the requirements of the covenant. In addition, having read that decision, I do not find it pertinent to my request for the attorney approval document. I am not questioning the Board abandoning our governing documents as the reply suggests I may be doing. I am just asking to get a copy of the attorney approval. If the intent is to rely upon Judge Cybulski’s decision which references board powers to make interpretations under the bylaws, the Board must understand their powers under the Covenants differ greatly and the Judge referencing the Covenants is something I do find included in the decision. Bylaw Article XII (A) states: “The Board shall have the power to interpret all the provisions of these Bylaws and such interpretation shall be binding on all persons …” Covenant 2.02 states: “Additional Force and Effect. In addition, each provision in this Declaration shall also be interpreted in the light of its express language, context and intent …” Though the Board may have broad power under the Bylaws, everyone making an interpretation of any Covenant is required to adhere to Covenant 2.02.
My reference to fiduciary responsibilities is not related to the Association making a profit, and I do not know why that is injected into the reply. Covenant 11.06 stating 12%, 15% or 18% and the collecting any of those amounts will serve the same purpose and have the same benefit or impact to the Association. None of them are considered as a profit for the Association. Referring to how the interest is seen, i.e. making a profit is not “up to the perception viewing it” but is a decision made by the IRS. In addition, I am not questioning whether the interest rate is a “de facto penalty.” That decision was made by the creators of the Covenants, can only be amended by a vote of the Members, and is not available for interpretation by the Board.
The reply closed with a reference to “partners” as I used it in my June 5th document request. I referenced 35-2-418(4) “For purposes of this section, a director of the corporation has an indirect interest in a transaction if: (a) another entity in which the director has a material interest or in which the director is a general partner is a party to the transaction.” I have not yet searched for court cases that define partners. However, tithing members of Church Universal and Triumphant are all contributing specified amounts to support the Church, which establishes a material interest and/or makes them general partners. In addition, the Church is a formal church with sacred rituals, inner temple teachings, defined levels of membership or position (Communicant, Keeper of the Flame, etc.,) members judging or influencing advancement and punishment of other members, and there being known repercussions for actions not approved by the Church, that all must be considered. Directors that are Church members are financially depending on other Church members, and in the common definition of partners, have a conflict of interest if they are involved in granting waivers or reducing interest rates for other Church members. We may have to agree to disagree on this matter, but I hope all Directors consider the risks they take if they become involved in approving interest rates lower than that voted on by Landowners for other Church members.
Leo Keele
Attachments:
