I would like to share with you what I gave the KRCE Board at the meeting tonight. Only a handful of people attended. As you know, recently the board sent a survey to each owner asking if they want to dissolve the association. Well over half who responded want the HOA dissolved.
The following is in response to 'law' cited by the board and Pres. James Saunders in a letter to me in February last and that they keep repeating to members who question them.
He states: "In any case, an movement to disband KRCEOA, Inc. will have to contend with Part 3 - Chapter 17 #8724 which states: Without the approval of 100 percent of the members"......(see provision below)
One has to wonder if the board is unable to read the law why they don't ask our high priced attorney. And IF they did get this opinion from the attorney, we have more problems than we know.
That provision applies ONLY after dissolution in winding up of the association. The majority of owners surveyed by KRCE state they want dissolution. It only takes a 50% majority to dissolve. They have dragged this out nearly a year with their only response being they have no intention of doing what the majority wishes. One attendee called their practices 'un-American.' Un-American indeed. Don't we get enough duplicity from the state, county and federal bureaucrats without this?? And what a shame because suing KRCE will cost all of us. The board doesn't seem to mind wasting more of your money on legal fees.
5/20/08 Presented at KRCE Board Meeting
Mr. Saunders and the board insists there must be 100% membership vote to dissolve.
They are citing a provision in the law which ONLY applies AFTER petitioning to dissolve in the 'winding up' phase. In fact 50% (see correct provision below) of membership is required for voluntary dissolusion. In fact, the board itself can move to dissolve.
If the board insists 100% must be required why did they waste the time and money on committees, mailings and a survey that showed over 50% wanted to dissolve?? Just to tell us they had no intention of following the membership wishes?
http://law.justia.com/californi
CORPORATIONS CODE SECTION 1900-1907
1900. (a) Any corporation may elect voluntarily to wind up and dissolve by the vote of shareholders holding shares representing 50 percent or more of the voting power.
(b) Any corporation which comes within one of the following descriptions may elect by approval by the board to wind up and dissolve:
(1) A corporation as to which an order for relief has been entered under Chapter 7 of the federal bankruptcy law.
(2) A corporation which has disposed of all of its assets and has not conducted any business for a period of five years immediately preceding the adoption of the resolution electing to dissolve the corporation.
1900.5. (a) Notwithstanding any other provision of this division,when a corporation has not issued shares, a majority of thedirectors, or, if no directors have been named in the articles or been elected, the incorporator or a majority of the incorporators may sign and verify a certificate of dissolution stating the following:
1901. (a) Whenever a corporation has elected to wind up and dissolve a certificate evidencing such election shall forthwith befiled.
(b) The certificate shall be an officers' certificate or shall be signed and verified by at least a majority of the directors then in office or by one or more shareholders authorized to do so by shareholders holding shares representing 50 percent or more of the voting power and shall set forth:
(1) That the corporation has elected to wind up and dissolve.
(2) If the election was made by the vote of shareholders, the number of shares voting for the election and that the election was made by shareholders representing at least 50 percent of the voting power.
(3) If the certificate is executed by a shareholder or shareholders, that the subscribing shareholder or shareholders were authorized to execute the certificate by shareholders holding shares representing at least 50 percent of the vote
KRCE BOARD cites this:
This section is regarding ONLY corps which are already in dissolvement phase and how to handle assets during that period.
CORPORATIONS CODE SECTION 8710-8724
8710. The powers and duties of the directors (or other persons appointed by the court pursuant to Section 8515) and officers after commencement of a dissolution proceeding include, but are not limited to, the following acts in the name and on behalf of the corporation:
(a) To elect officers and to employ agents and attorneys to iquidate or wind up its affairs.
(b) To continue the conduct of the affairs of the corporation insofar as necessary for the disposal or winding up thereof.
(c) To carry out contracts and collect, pay, compromise and settle debts and claims for or against the corporation.
(d) To defend suits brought against the corporation.
(e) To sue, in the name of the corporation, for all sums due or owing to the corporation or to recover any of its property.
(f) To collect any amounts remaining unpaid on memberships or to recover unlawful distributions.
(g) To sell at public or private sale, exchange, convey or otherwise dispose of all or any part of the assets of the corporation for an amount deemed reasonable by the board without compliance with
the provisions of Section 7911 and to execute bills of sale and deeds of conveyance in the name of the corporation.
(h) In general, to make contracts and to do any and all things in the name of the corporation which may be proper or convenient for the purposes of winding up, settling and liquidating the affairs of the corporation.
This is the INCORRECT provision KRCE board keeps citing which is IRRELEVANT to move to dissolve and is part of Section #8610-
8724. Without the approval of 100 percent of the members, any contrary provision in this part or the articles or bylaws notwithstanding, so long as there is any lot, parcel, area, apartment or unit for which an owners association (as defined in Section 11003.1 of the Business and Professions Code and created in connection with any of the forms of development referred to in
Section 11004.5 of the Business and Professions Code) is obligated to provide management, maintenance, preservation or control:
(a) The owners association or any person acting on its behalf shall not: (AFTER DISSOLUTION!!)
(1) Transfer all or substantially all of its assets; or
(2) File a certificate of dissolution; and
(b) No court shall enter an order declaring the owners association duly wound up and dissolved.
(d) As used in this section, "process of winding up" includes proceedings under Chapters 15 (commencing with Section 8510) and 16 (commencing with Section 8610) and also any other distribution of assets to persons made in contemplation of termination or abandonment of the corporate business.
8722. (a) A corporation which is dissolved nevertheless continues to exist for the purpose of winding up its affairs, prosecuting and defending actions by or against it and enabling it to collect and discharge obligations, dispose of and convey its property and collectand divide its assets, but not for the purpose of continuing its activities except so far as necessary for the winding up thereof.
THE Correct LAW for dissolution:
CORPORATIONS CODE SECTION 8610-8618
8610. (a) Any corporation may elect voluntarily to wind up and dissolve (1) by approval of a majority of all members (Section 5033),
or (2) by approval of the board and approval of the members (Section 5034).
8611. (a) Whenever a corporation has elected to wind up and dissolve a certificate evidencing that election shall forthwith be filed. A copy of that certificate shall be filed with the Attorney
General if the corporation holds assets in charitable trust or has a charitable dissolution clause.
(b) The certificate shall be an officers' certificate or shall be signed and verified by at least a majority of the directors then in office or by one or more members authorized to do so by approval of a
majority of all members (Section 5033) and shall set forth:
(1) That the corporation has elected to wind up and dissolve.
(2) If the election was made by the vote of members alone, thenumber of votes for the election and that the election was made by a majority of all members (Section 5033).
All the above concerns 'voluntary' dissolution. KRCE could be dissolved 'involuntarily' if the board continues to refuse to follow the law and we are forced to let the courts settle the issue.
CORPORATIONS CODE SECTION 8510-8519
8510. (a) A complaint for involuntary dissolution of a corporation on any one or more of the grounds specified in subdivision (b) may be filed in the superior court of the proper county by any of the following persons:
(1) One-half or more of the directors in office.
(2) A person or persons holding or authorized in writing bypersons holding not less than 331/3 percent of the voting power exclusive of memberships held by persons who have personally participated in any of the transactions enumerated in paragraph (5) of subdivision (b).
(b) The grounds for involuntary dissolution are that:
(1) The corporation has abandoned its activity for more than one year.
(2) The corporation has an even number of directors who are equally divided and cannot agree as to the management of its affairs, so that its activities can no longer be conducted to advantage or so that there is danger that its property will be impaired or lost or its activities impaired and the members are so divided into factions hat they cannot elect a board consisting of an uneven number.
(3) There is internal dissension and two or more factions of members in the corporation are so deadlocked that its activities can no longer be conducted with advantage.
(4) When during any four-year period or when all voting power has been exercised at two consecutive meetings or in two written ballots for the election of directors, whichever period is shorter, the members have failed to elect successors to directors whose terms have expired or would have expired upon election of their successors.
(5) Those in control of the corporation have been guilty of or have knowingly countenanced persistent and pervasive fraud, mismanagement or abuse of authority or persistent unfairness toward any member or the corporation's property is being misapplied or wasted by its directors or officers.
Submitted by Sue Nix for the DOA committee ( provisions cited are those which are relevant, not always complete statutes)
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