Majority Vote Question

[Guest sdlaird11]

I have a voting question.  The Board has authority to approve certain debt and a certain dollar value of debt with out member approval.  Other debt requires approval.  With respect to member approval of debt the Bylaws state in Section 9,

"The Board may incur such additional indebtedness as may be authorized by the prior written consent of at least a majority of the Proprietary Members in good standing or the prior approving vote of at least a majority of such Members given at an annual or special meeting noticed and called for that purpose."

We have an a different portion of the Bylaws (Section 13) for voting on By-Law amendments that states,

"The By-Laws may be amended by an affirmative vote of two-thirds (2/3) of the Proprietary Members in good standing present at a meeting duly called; provided, however, that the affirmative vote of two-thirds (2/3) of the Proprietary Members in good standing present at a meeting specially called for the purpose of amending the following enumerated sections of these By-Laws shall be required:..."

Finally, we have another section (Section 2) about size of membership that states:

"This number shall only be changed by an affirmative vote of a majority vote of Proprietary Members in accordance with section of 7.2 of these By-Laws." 

7.2 falls under "membership meeting" and says "Each Proprietary Member shall be entitled to one vote on all matters and have the right to do so in personor by agent..."  (one person, one vote and proxy's are allowed.)  This section apparently presumes in person voting.  

I am having a difficult time with the language, especially since we have two instances of "affirmative vote" of either a majority or 2/3 versus "prior written consent of at least a majority of the Proprietary Members."  Also we have a further distinction for "the prior approving vote of at least a majority given at an annual or special meeting"

 

For the Section 9 language, does a majority of votes cast suffice to incur additional indebtedness?  Or must the "yes" votes equal a majority of the membership regardless of the number of votes cast?  Unlike the other sections, it does not reference an "affirmative vote" of a majority or 2/3. 

Also, for Section 9, because it separately talks about votes "given at an annual or special meeting," is there a distinction in how the votes are counted if they are cast at a "special meeting"?  Thanks in advance.  

 

[Josh Martin]

I will first note that it is ultimately up to your organization to interpret its own bylaws. It may also be advisable to seek legal advice. With that said...

On 3/4/2024 at 3:45 PM, Guest sdlaird11 said:

For the Section 9 language, does a majority of votes cast suffice to incur additional indebtedness?  Or must the "yes" votes equal a majority of the membership regardless of the number of votes cast?  Unlike the other sections, it does not reference an "affirmative vote" of a majority or 2/3. 

The rule in question provides as follows.

"The Board may incur such additional indebtedness as may be authorized by the prior written consent of at least a majority of the Proprietary Members in good standing or the prior approving vote of at least a majority of such Members given at an annual or special meeting noticed and called for that purpose."

There are two separate clauses here:

• "authorized by the prior written consent of at least a majority of the Proprietary Members in good standing"
• "the prior approving vote of at least a majority of such Members given at an annual or special meeting noticed and called for that purpose."

The first clause, which refers to "prior written consent," most likely refers to a situation in which the consent is obtained outside of a meeting. In my experience, that is generally what the phrase "prior written consent" refers to. This rule specifically requires the consent "of at least a majority of the Proprietary Members in good standing."

The latter clause provides for "the prior approving vote of at least a majority of such Members." In context, "such members" clearly refers to "the Proprietary Members in good standing," which is referenced earlier in the sentence. In other words, this clause could also be read as "the prior approving vote of at least a majority of the Proprietary Members in good standing."

Based on all of this, my personal view is that for a motion to incur additional indebtedness to be adopted, the "yes" votes must be equal to or greater than a majority of the entire membership, regardless of the number of votes cast.

On 3/4/2024 at 3:45 PM, Guest sdlaird11 said:

Also, for Section 9, because it separately talks about votes "given at an annual or special meeting," is there a distinction in how the votes are counted if they are cast at a "special meeting"?

No, I don't think so. The clause in question seems intended purely to indicate that the motion in question may be considered at either an annual meeting or at a special meeting called for this purpose. It does not, in my view, affect the number of votes required for passage or the manner in which the votes are counted.

Edited March 4, 2024 at 11:34 PM by Josh Martin