Report of the EGM of May 7th at Stamford
Posted by: Mike Clark
Date: May 8, 2009 02:38PM
EGM of the Steam Car Club of GB Ltd, Stamford, Thursday May 7th 2009
Thursday’s EGM was requisitioned by members themselves after the management of the Company failed to respond to the demand by over 10 percent of the membership for an EGM.
The purpose of this EGM, you will recall, was to decide on resolutions calling for the company's assets to be shared according to members' wishes and for the company then to cease to trade.
15 Members met under the legal guidance of Nick Sutherland of Hansell's Solicitors, who also received 105 proxy forms from members and carried out the counting of votes as an unbiased referee.
Since the directors, board of management and officers of the Company had announced their resignation on May 5th no Board member could be present to chair the meeting so it was necessary for members present to elect a chairman for this EGM. Mike Clark was elected.
Explanations were presented by Mike Clark of the efforts made to achieve an amicable separation of the two factions in the SCCGB Ltd, and by Barry Herbert as to why we had to requisition this members' EGM.
Greg Walker made clear that the claim by the resigning directors that the EGM of May 7th was rendered invalid by a failure to notify the Company's auditors of the meeting was incorrect as the Company is not required to have, and does not have auditors. This meeting complies with all legal requirements and its decisions will be implemented.
Greg Walker also spoke of the financial position of the company which appears to be insolvent as a result of expenditure by the recently resigned management. Financial information which had been requested for this EGM was not delivered by the board who have just resigned. We merely have a statement by Gareth Jones that cash at the bank is about £2000, having declined from £8500 at the time of the handover to his board. There is scant explanation for this expenditure.
Members proposed and seconded the two resolutions which were then put to the vote.
The result of the votes which were the same for both resolutions were as follows:-
For Resolution One --- 101 votes Against Resolution One --- 4 votes
For Resolution Two--- 101 votes Against Resolution Two --- 4 votes
Both resolutions were therefore carried so the outcome is that the assets will be shared and the Company will cease to trade.
However as the Company appears to be insolvent or close to insolvent, having more financial obligations than cash, there are no net assets to share and the need now is to manage the situation resulting from the resignation of the board and officers, to find out what the true financial position is and as far as possible to ensure that any debts are paid.
It being necessary for the Company to have at least one director, members were then asked to appoint directors and in a unanimous show of hands Barry Herbert and Greg Walker were appointed.
As a consequence of the apparent insolvency of the Company and to avoid the offence of trading while insolvent the Company ceased to trade at the closure of the EGM at 4.05pm May 7th 2009.
As to the EGM requisitioned by the recently resigned board and convened for May 10th in Coventry there is clear legal advice that Resolution 1 for that meeting is inadmissible because it seeks to declare the EGM of May 7th invalid which it cannot do. It also asks members to ratify (or rather, tries to, since the second sentence of the resolution has no meaning) the termination of members which it cannot do as there is no mechanism in the company rules for this. The justification cited for this punishment is not for any actual misdemeanour, but merely for the "thought crime" of wishing to destroy the company which is no justification. In any case the question of confidence in the board is irrelevant since they have already resigned. Resolutions 2 and 3 of the EGM of May 10th have already been decided upon by members at the EGM of May 7th.
In summary, the EGM of the 7th of May is legally valid so its decisions are being implemented. In contrast the EGM of May 10th, proposing as it does one inadmissible resolution and two which have already been passed with a majority of 96% by members, has no further purpose and is hereby cancelled. We note that the former board in their resignation letter proposed that this EGM should be adjourned and that should it take place they will not attend.
Barry Herbert, Greg Walker, Mike Clark
Edited 1 times. Last edit at 05/14/09 07:43AM by Mike Clark.