Carr is the lead attorney for plaintiffs who filed suit against the electric cooperative in October 2007.
One amendment that is unsettling for Carr and his legal partner, David Cohen, requires members to submit, in writing, any issue or proposal to be considered at an annual meeting 70 to 100 days in advance of that meeting.
According to a release from EMC, "It just ensures that a matter is not introduced for the first time at an annual meeting for an immediate vote before members have had sufficient time to properly evaluate the relative merits or shortcomings of the proposed matter..."
However, Carr and Cohen said the added section to the bylaws just restricts members from bringing up new issues and voting on them at the meeting, as has been done in the past.
"The new 70-to-100-day requirement restricts the members' ability to bring up any new matters or business for discussion and vote at annual or other meetings, as is their right under the EMC statutes, and as members have historically been able to do since 1938," Cohen said.
Additionally, further details of the amendment get confusing and make it difficult for members to understand when they can submit a notice, Carr and Cohen said.
"It would take a mule team of lawyers to determine when the notice is due," Carr said.
He said the 70-to-100-day notice would have to be given unless, "The annual meeting is not scheduled 30 days before or 30 days after the anniversary date of last year's meeting; in which event, the member's notice must be given 'by the later of the 20th day following the Annual Meeting Announcement Date and 70 days prior to the date of the annual Meeting.'"
Carr said, "This brain teasing equation can have one goal and one goal only - to make it virtually impossible for members to meaningfully bring up new business at the annual meeting, a right specifically reserved to the members by the EMC act."
Cohen took it further by stating: "Removing all the legalese, this is a pure power grab and effort to tighten management's control over the entire EMC and its funds. It is wrong. The leadership is supposed to serve the members' best interest and protect and preserve their rights, not deliberately take power away from them."
But EMC spokeswoman Carol Cookerly said the change is in the best interest of co-op members.
"Putting information in their hands, in advance, to ponder and research may actually motivate people who are interested in a particular subject to show up and participate," she said. "Otherwise, if initiatives or ideas were only brought forth on the floor, 1) you would have no idea it was being done and, 2) if it were valid or against bylaws, and if it were good for the membership."
The 2008 and 2009 annual meetings have yet to occur after being postponed due to the lawsuit, which alleged breach of fiduciary duty, gross mismanagement, waste of corporate assets and unjust enrichment in relation to the management and operations of the co-op and Cobb Energy. Although that suit was settled in December 2008, Carr and the EMC's attorneys remain tied up in legal sparring due to bylaw changes regarding proxy voting that were made just days after the settlement. Carr believes those amendments went against the settlement. A Superior Court judge disagreed, and Carr and Cohen took the matter to the state Court of Appeals, which is to decide on the matter on or before July 16. Interestingly, another part of Tuesday's bylaw changes touch on the same issues addressed in the Dec. 12, 2008, amendments.
The other bylaw amendment that EMC's board of directors unanimously approved Tuesday, "allows members to vote by proxy at annual meetings on matters other than voting on directors, thus allowing members to participate in the cooperative's governance process even if they cannot attend annual meetings in person," according to the co-op.
EMC spokesman Sam Kelly said, "It is clear that being able to vote by proxy will give all of our 190,000-plus members a more accessible and convenient way to cast their votes on matters to be considered at annual meetings."
Being able to vote by proxy was included in the Dec. 12, 2008, bylaw changes that are currently being appealed. Those bylaw changes allowed for proxy voting at a special meeting where directors were not being elected. Tuesday's changes expand proxy voting to the annual meetings. The amendment does still add that the proxy voting would not pertain to voting on electing directors, which co-op officials say the want to ultimately do if the appeal goes in their favor.
Carr had earlier said when the settlement in the lawsuit was approved on Dec. 3, just days before the co-op made the bylaw changes, it called for plaintiffs, not the co-op, to draft the language to be sent out to EMC customers regarding the proxy option. Carr believes the bylaw changes were illegal under the settlement, which led to the appeal.
Carr would not say what action he will take regarding the new bylaw changes. He said Thursday afternoon that he and Cohen were still reviewing all the material before making a determination.
Kelly said about Tuesday's bylaw changes, "This makes Cobb EMC's bylaws consistent with the bylaws of many other companies with large voting bases."
The bylaw changes can be reviewed at the co-op's Web site, www.cobbemc.com.
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