Directors, Vice Directors and Officers
* We have been told that the long established ARRL corporate
structure of an elected Director and an elected Vice Director, with
automatic right of succession and a full, but standby, right to vote and
act as his/her companion Director, is not legal under Connecticut law.*
* That statement is not true*.
Connecticut law expressly permits — and has permitted for a very
long time — a nonstock corporation to establish a corporate governance
structure "/... for the conduct of lawful activities with such
variations and modifications ... as the interested parties may agree
upon/." The Supreme Court of Connecticut, in reviewing the governing
statute, observed "/The practical effect of these sections is to afford
considerable latitude to the parties to a corporate venture to design an
enterprise to fit their particular needs, without statutory
encumbrance/." /Steeneck, et al v. University of Bridgeport, et al/, 668
A.2d 688 (Supreme Court of Connecticut - 1995).
It took less than 20 minutes to find the applicable statutes and
Connecticut Supreme Court opinion.
As Vice Director Raisbeck pointed out, the ARRL is considered by
Connecticut law as a "pre-1997" corporate entity. This means the ARRL's
certificate of incorporation is dated before January 1, 1997. The
General Statutes governing the formation and structure of a Connecticut
nonstock corporation were revised with an effective demarcation date of
January 1, 1997. The revised statutes, known as the /Connecticut Revised
Nonstock Corporation Act/, expressly permits a "pre-1997" entity to
chose to be governed by either the older statutes or the Rev'd Nonstock Act:
(b) If the certificate of incorporation, in effect on
January 1, 1997, of a corporation without capital stock formed under
the laws of this state, whether general law or special act, prior to
said date, contains any provision contrary to, inconsistent with or
in addition to any provision of sections 33-1000 to 33-1290,
inclusive, but which provision was permitted to be contained in such
certificate pursuant to the provisions of applicable law as in
effect prior to January 1, 1997, the provision contained in such
certificate shall govern such corporation and the provisions of said
sections shall not be held or construed to alter or affect any
provision of the certificate of incorporation of such corporation
inconsistent herewith, except as provided in sections 33-1181,
33-1203, 33-1243 and 33-1244. /CT Rev'd Nonstock Corporation Act
§33-1001(b)./
* However, for the purpose of determining whether the long established
ARRL structure is valid and legal, it makes no difference to which set
of statutes we look — the pre-1997 **/General Statutes/**or the **/CT
Rev'd Nonstock Corporation Act. /**The outcome and the answer are the
same*./
/
The pre-1997 statute is /General Statutes/ §33-420/./ It states:
This chapter *shall be construed as to provided for a general
corporate form for the conduct of lawful activities with such
variations and modifications from the form so provided as the
interested parties may agree upon,* subject to the interests of the
state and third parties. Whether or not a section of this chapter
shall contain the words 'unless the certificate of incorporation or
bylaws otherwise provide', or words of similar import, no provision
of a certificate of incorporation or bylaw shall be held invalid on
the ground that it is inconsistent with such section unless such
section expressly prohibits variations therefrom, or prescribes
minimum or maximum numerical requirements or a substantial interest
of the state or third parties is adversely affected thereby.
The post 1997 statute is /CT Rev'd Nonstock Corporation Act
§33-1001. /It says:
§33-1001. Construction of Statutes.
(a) Sections 33-1001 to 33-1290, inclusive, *shall be construed
as to provided for a general corporate form for the conduct of
lawful activities with such variations and modifications from the
form so provided as the interested parties may agree upon*, subject
to the interests of the state and third parties. Whether or not a
section of said sections contains the words 'unless the certificate
of incorporation or bylaws otherwise provide', or words of similar
import, no provision of a certificate of incorporation or bylaw
shall be held invalid on the ground that it is inconsistent with
such section unless such section expressly prohibits variations
therefrom, or prescribes minimum or maximum numerical requirements,
or a substantial interest of the state or third parties is adversely
affected thereby.
As mentioned above, the Supreme Court of Connecticut addressed the
right, and authority, of Connecticut nonstock corporations to create a
"general corporate form" as they saw fit in the /Steeneck, et al v.
University of Bridgeport/ case. The University of Bridgeport had created
a three-tiered set of trustees. A dispute developed between two of the
three sets of trustees. The principal issue in Steeneck was whether one
set of the trustees had "standing" to bring the suit. What was never
questioned was the legality of the University of Bridgeport's structure
of multiple trustees.
The Supreme Court stated: "/In this regard/ [referring to the
University's tied structure], /we note that the act clearly envisions
that individual corporations may deviate from the simple, traditional
framework it recognizes for corporate management. See General Statues
§33-420 (Footnote 15)./
Footnote 15 reads:
This chapter *shall be construed as to provided for a general
corporate form for the conduct of lawful activities with such
variations and modifications from the form so provided as the
interested parties may agree upon,* subject to the interests of the
state and third parties. Whether or not a section of this chapter
shall contain the words 'unless the certificate of incorporation or
bylaws otherwise provide', or words of similar import, no provision
of a certificate of incorporation or bylaw shall be held invalid on
the ground that it is inconsistent with such section unless such
section expressly prohibits variations therefrom, or prescribes
minimum or maximum numerical requirements or a substantial interest
of the state or third parties is adversely affected thereby.*//**See
also S. Cross, Connecticut Corporation Law (1989) §1.4: ("The first
substantive section of each of the Stock and Nonstock Corporation
Acts sets forth the broad, liberal policy of permitting 'interested
parties' to agree upon variations and modifications from the
corporate form provided by the code.... The practical effect of
these sections is to afford considerable latitude to the parties to
a corporate venture to design an enterprise to fit their particular
needs, without statutory encumbrance.")*/
/
//
* The ARRL's Corporate Structure Has Been Legal For A Long, Long Time*
What has been carefully ignored by the proponents of eliminating
the Vice Directors is that the ARRL's corporate structure was not
created by two Novice licensees while chowing down on a Yanni's sausage
Grinder. It was formed by men of stature based on the advice of
competent legal counsel. That structure — the structure which has never
been questioned — was legal when it was created. It is disingenuous in
the extreme to suggest those lawyers were incompetent.
Whether that structure is examined under the pre-1997 law (/General
S//tatu//tes §33-420/) or the current law (/CT Rev'd Nonstock
Corporation Act §33-1001) — /the ARRL's corporate form is — and has been
— legal under Connecticut law for a very long time./
/
* The Day Pitney "Memorandum"*
I won't address the shortcomings of the Day Pitney "Memo" — it was
brilliantly debunked by Vice Director Tiemstra — except to note, as did
Vice Director Tiemstra, it does not state the ARRL's general corporate
form of an elected Director and an elected Vice Director, with automatic
right of succession and a full, but standby, right to vote and act as
his/her companion Director, is not legal under Connecticut law. Only the
Gallagher, Bellows, Imlay "memos" of 4.3.17 and 4.28.17 make that
unfounded, unsupported claim.
What was easily found by a "non-Connecticut" lawyer in 20 minutes
was simply ignored by the "preeminent" Day Pitney.
* The "Fighting For Their Political Life" Email*
There has been too much of personal insults this afternoon. It
truly gets old.
However, there is an email from a Director that insults 15 (well,
14, excluding the questionable guy from Texas) men and women whose
service to Amateur Radio is of no less value that the condescending
Director. I am offended, not on my behalf, but on the behalf of the 14.
It smears the Vice Directors with the allegation that their
opposition is based on their "fighting for their political life." Horse
Pooey. That is a coward's insult.
All of the Vice Directors with whom I am honored to serve — and
with whom I have spoken — serve, for free, as do the Directors because
of their love of Amateur Radio and the League. I haven't spoken to one
regarding this matter whose opposition is based on the cornucopia of
benefits bestowed upon them as Vice Directors or the opportunity to
twice a year bask in the tropical paradise of Newington, Connecticut.
Their opposition — as is apparently that of 9-10 Directors, based on
current reports — is founded on the law, their belief as to what is best
for the Members and their belief as to what is best for the League.
* Let's Vote, Why Don't We
*
We have all been cautioned to not question our "preeminent" betters
and to not even think of — can I use that word? — "voting".
I respectfully suggest we do just that. It will not be a binding
vote, but rather than waste any further time on this matter, it would do
well to have a "sense of the Board" — both the Front 15 and the Back 15.
With all due respect,
_______________________________________
John Robert Stratton
N5AUS
Office Telephone:512-445-6262
Cell:512-426-2028
P.O. Box 2232
Austin, Texas 78768-2232
*_______________________________________***
