UPDATE ON SUPREME COURT HEARING TODAY, Tuesday, Oct 15k 2013: CIRI CLASS ACTION LAWSUIT HEARING BY THE ALASKA SUPREME COURT, Tuesday, October 15th, 2013, Anchorage, Alaska – By Bob Rude A Shareholder Class Action lawsuit on the 2010 CIRI Elections held in Puyallup, WA was filed to obtain fair elections and equal rights for all CIRI board candidates. The CIRI management’s action in dividing Rude/Rudolphs proxies 50-50 has no legal basis. CIRIs unilateral division of the Rude/Rudolph proxies violates Rude/Rudolphs due process rights. When CIRIs Election Judge divided the Rude/Rudolph proxies, he effectively voided 50% of their proxies. There are no laws, statutes or corporate bylaws that authorize such division of proxies. However, only the Division of Banking & Securities and the courts have that authority. Rude and Rudolphs proxies were listed as discretionary in the Wall Report on proxies as of 6/2/10 at 1:40 p.m. showed candidate group discretionary votes for CIRI at 1,223,343.651 and 475,072.440 for Rude/Rudolph. Directed votes for individuals showed Rude got 6,728.689 votes. Wall Report on proxies as of June 5 2010 at 11:03 a.m. showed candidate group discretionary votes was crossed out and Rude directed votes were written in at 237,536.220 and Rudolph direction in at 237,536.220. (?) In a memo dated 11.12.81 to Division Director Willis Kirkpatrick, Alaska Attorney General Wilson L Condon cited Klawock Heenya corporate bylaws, which permitted an inspector of elections to exercise discretion in invalidating certain proxies on the basis that the election judge deemed the proxies to have been received under false or misleading statements. No Corporate Election Judges have such authority. If these types of determinations are allowed by corporate rule, an insurgent faction of ANCSA shareholders could assume control of the corporation simply by a shareholder faction taking control of the inspector of elections. A Cease and Desist and Order Imposing Civil Fine, #97-10S in the matter of Kenai Native Association, dated June 4, 1997, signed by Division Director Larry Carroll, of the Division of Banking and Securities and Corporations, included the Division’s findings that the election rules adopted by Kenai Natives Association, Inc., creating the position of election judge with the powers to hear complaints, make determinations, and invalidate proxies, is an invalid authority granted the Election Judge by Kenai Native Association, Inc. and is in violation of Alaska Statute 45.55.906(a). Accordingly, pursuant to AS 45.55.920, the Division orders Kenai Natives Association, Inc. to cease and desist from violations of the Alaska Securities Act and further imposes a civil penalty of $500. All actions dividing the Rude/Rudolph proxies by the CIRI Election Judge for the 1997 election of directors are hereby declared invalid, by reason of the improper assumption of the regulatory function by the Corporation. Any proxies so invalidated are to be counted and adjusted results announced to the shareholders by a time certain and in a manner suggested by the Corporation and agreed to by the Division. Pursuant to AS 45.55.920(a)(1)(C), the Division retains the authority to void proxies prior to or after their use if obtained in false and misleading manner. The Corporation or a shareholder may submit a complaint and documentation relative to any proxies allegedly obtained in such a manner with appropriate statutory remedy if warranted. 3 AAC 08.335(f)(3) requires as to proxy: A proxy may confer discretionary authority to vote with respect to the following: (3) the election of a person to an office for which a bona fide nominee is named to the proxy statement and the nominee is unable to serve or for good cause will not serve. Under 3 AAC 08.365(10), a Nominee means: a person who has consented to being named in a proxy statement and who has agreed to serve if elected. Rudolph was not an official candidate because he was not nominated nor did he accept nomination and he was not present at the CIRI annual meeting. Under AS 10.06.420 (d), voting shares: gives a proxy holder the right to distribute votes among any number of candidates of his choice. Mr. Rudolph withdrew as a candidate and his withdrawal notice was delivered to CIRIs Election Judge before the Puyallup meeting was called to order. After the meeting was called to order the Election Judge informed shareholders attending the meeting that RudeRudolph AWAD proxies were divided 50-50. Mr. Rudolph did not attend the meeting due to costs of travel and he was not nominated nor did he accept nomination at the meeting. And since Rudolph withdrew as a candidate and wasnt nominated under CIRI Election Procedures and State Statutes Rudolph’s proxies could be voted by Rude. CIRI election procedures and rules of conduct for shareholder meetings adopted by the CIRI Board of Directors included in proxies and proxy solicitations qualification of proxy holders: If a shareholder names more than one person to be his proxy holder and one or more of the persons so named is ineligible, and the proxy provides for the power of substitution, the ineligible substitutes to act in their stead; if the proxy does not provide for the power of substitution, only the eligible proxy holders can exercise the proxy and any ineligible persons are disregarded as if they had not been named. Another CIRI proxy rule stated: Under multiple proxy holders---where two or more people are named as proxy holders on a single proxy form, the individuals as a group serve as the proxy holder; they decide among themselves how to cast all votes on one ballot. Mr. Rudolph withdrew as a candidate because he did not have adequate funds to travel to and from Puyallup, Washington, to participate in the CIRI annual meeting and election. Use of Power of Substitution---CIRI attorney wrote CIRI Election Judge a letter a day and a half before the meeting was convened, claiming Rude/Rudolph proxy form was erroneously drafted and because of that, the Rude/Rudolph proxies were to be divided, 50-50. The Rude/Rudolph proxy stated: I hereby appoint as my attorney in fact and proxies (Proxies) Robert W. Rude and Harold F. Rudolph and each of them with full power of substitution to vote all shares of stock of CIRI that I own...If this proxy is signed and no specific direction is given, it will be voted for Robert W. Rude and Harold F. Rudolph. Mr. Rude and Mr. Rudolph present at the meeting whether in person or by substitution (or if only one thereof shall be present and act) that one shall have and exercise all powers of Proxies hereunder. Alliance 2003 Proxy included: I hereby appoint as my attorney in fact and proxies (Proxy holders) Kristian Anderson, Darlene Sambo, William English, Thomas Huhndorf, Harold Rudolph, and each of them, each with full power of substitution, to vote all shares of stock of CIRI that I own, with all powers I would possess if personally present. If this proxy is signed and no specific direction is given, this proxy will be voted for the nominees named under (1) below (nominees). A majority of the nominees present at the annual meeting, either in person or by substitution (or if only one thereof shall be present and then that one) shall have and exercise all the powers of proxy holders under this proxy. CIRI June 4, 2011 Proxy included: I hereby appoint as my attorney in fact and proxies (proxies) the members of the CIRI Board of Directors, and each of them, each with full power of substitution to vote all shares of stock that I own. If this proxy is signed and no specific direction is given, it will be voted for the board-endorsed candidates. A majority of the members of the CIRI Board of Directors present at the meeting either in person or by substitution (or if only one thereof shall be present and act then that one shall have and exercise all the powers of proxies hereunder. The January 4, 1999 Legislative Audit #08-4572-99 (page 47), states: the auditors recommend equal treatment for proxy expenses until stock restrictions are lifted on Naive corporation stock, qualified candidates for board positions should be treated equally regarding access to corporate proxy statements and corporate resources. For many shareholders the resources needed for drafting and printing costs as well as the postage are not available. This would have the effect of limiting candidates to those who have their own personal resources and to corporate supported candidates. Unfair Elections--CIRI proxy solicitations are made to favor the board endorsed candidates and all their proxy materials are prepared and mailed by the corporation. Only the management candidates travel at corporate expense and all their food, lodging and transportation costs are paid for by the Corporation. Independent candidates have to pay their own expenses often exceeding over $10,000 per candidate. Even as a sitting director, CIRI would not pay my past expenses to meet with shareholders at informational meetings, meet and greet meetings and annual meetings. Since the meeting was in Washington in 2010, I had to pay over $1200 to go there. Mr. Rudolph did not have the funds to attend the meeting in Puyallup so he withdrew as a candidate. Holding a meeting in Puyallup, Washington makes attending the meeting inaccessible to most of the shareholders. When costs of travel and lodging is added, few shareholders can attend. that Only 98 people signed in for the 2010 meeting and when CIRI directors, board candidates, senior managers, CIRI staff, non-profit affiliates managers, staff and the three CIRI participating committees members who all have their expenses paid for by CIRI are taken from the 98, there were only about 30-35 shareholders not paid by CIRI that attended the meeting. Section 1 of the State Constitution says that all persons are equal and entitled to equal rights, opportunities, and protections under the law. Section 7(h)(1) of ANCSA says that Native shareholders shall have all rights of a stockholder in a business corporation organized under the laws of the State of Alaska.
Posted on: Tue, 15 Oct 2013 07:41:28 +0000
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