Joel Channing Also Asks Counsel How to Get Rid of Sam Sloan

BINFO 200603309
Date 2006-08-02
From joel
Subject Removal of directors

* Subject: FW: Removal of directors
* From: "Joel Channing" joel@xxxxxxxxxxxxxxxxxxxxxxx
* Date: Wed, 2 Aug 2006 14:02:57 -0400
?


-----Original Message-----
From: Chessoffice@xxxxxxx [mailto:Chessoffice@xxxxxxx]
Sent: Wednesday, August 02, 2006 1:07 PM
Subject: FW: Removal of directors

In a message dated 8/2/2006 11:19:21 A.M. Eastern Daylight Time,
bhall@xxxxxxxxxxx writes:

Requested information ...

Bill Hall
Executive Director
United States Chess Federation
P.O. Box 3967
Crossville, TN 38557-3967
Phone: (931) 787-1234
Fax: (931) 787-1200

From: Michael Matsler [mailto:mmatsler@xxxxxxxxxxxxxxx]
Sent: Wednesday, August 02, 2006 9:36 AM
To: bhall@xxxxxxxxxxx
Cc: mcrush@xxxxxxxxxxxxxxx
Subject: Removal of directors



Bill:



As you requested, we have looked further into the issue
regarding removal of directors. As an Illinois not for profit
corporation, USCF is subject to that state's statutes and decisional
law. Under Illinois law the by-laws of the corporation are viewed as
the equivalent of a contract between its members and those chosen to
manage the affairs of the entity, referred to as directors. The USCF
by-laws as currently written do not provide directly for the expulsion
or removal of a director or prospective director; the executive board
may revoke membership after a hearing for cause upon thirty days'
notice, or the ethics committee may expel a member. Illinois law
further provides, however, that a director can be removed with or
without cause, as follows:



"In the case of a corporation with members entitled to vote
for directors, no director may be removed, except as follows:



(1) A director may be removed by the affirmative vote of
two-thirds of the votes present and voted, either in person or by
proxy.

(2) No director shall be removed at a meeting of members
entitled to vote unless the written notice of such meeting is
delivered to all members entitled to vote on removal of directors.
Such notice shall state that a purpose of the meeting is to vote upon
the removal of one or more directors named in the notice. Only the
named director or directors may be removed at such meeting."

Five questions I would be interested in asking Mike Matsler:

1) Is the Delegates meeting "a meeting of members entitled to vote
on removal of directors"? Harold Winston believes that only the
members who elect may remove, so the Delegates meeting could not
remove, but it could initiate a removal process with a 2/3 vote of the
membership required to remove.

2) Presently USCF has no recall process in its bylaws, but there
is a motion on the advance agenda to create one, which would allow
initiation of a recall by a 3/4 vote of the Delegates at the meeting
or by Delegate or voting member petition. If the Delegates approve
this motion, could they later in the meeting vote to initiate a recall
of a Board member whose term began earlier at the meeting?

3) Even if #3 is allowable, if the Board member being recalled has
committed no offenses during his brief term and the recall is based on
what he did before taking office, would that give him strong grounds
for a lawsuit?

4) If the Delegates vote not to certify the results of the
election even though it appears to have been properly conducted, would
this give an elected candidate strong grounds for a lawsuit?

5) It has been suggested that the Board revoke the USCF membership
of an elected candidate in order to prevent him from being seated on
the Executive Board. It can be reasonably argued that though this
candidate has behaved in a way that would violate USCF's "Standards of
Conduct for the USCF Executive Board" were he on the Board, he has not
behaved in a way that would justify revocation of membership. For
example, numerous USCF members are prison inmates and some have been
convicted of murder, but it has not been suggested that their
memberships be revoked. Would revoking this membership provide strong
grounds for a lawsuit?

Bill Goichberg

Go ahead and ask. But be sure to ask a top notch litigator (I
don't know Matsler's expertise) because anything that isn't
overwhelmingly in our favor is liable to be the subject of a lawsuit.
Joel



Please let us know if we can be of any further assistance.
Note that in my absence due to vacation from 8/9 to 8/22 you can
contact Maureen Crush or Shay Humphrey in our office.


Michael Matsler