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Monday, February 18, 2008

BYLAW CHANGE-- 01-- change may have been illegal

But if the Board did change the Bylaws so that
Directors now elected Directors, (instead of members
electing Directors as is required in the original
Bylaws), those new amended Bylaws, and the method
therefore the system of Directors now electing
Directors, may not be legal. We need more info.
Source-- [+]

California Corporation Code 5150 seems to say that if
the Directors of a corporation change the bylaws and
that has an effect/affect on the voting rights of the
members, then the members also have to approve those
amended Bylaws. It appears that was never done. It
appears the members never approved the change taking
the vote away from them and giving it to the

It may be the case that once this type of info becomes
available to a board of a corporation they no longer
have the legal right to make decisions for that
company until the matter is resolved. If so, then
time is of the essence in this matter.

The only thing now will be for the Board to work with
some members' representatives and an attorney to find
out what the legal matter is and how to correct the
problem. I hope the Board will NOT have any meetings
with any attorneys without several representatives of
the members also present. This is a matter which
involves potential members' rights and I don't think
the Board should be discussing this without members'
representatives involved also.

David Pizer

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