HomeMy WebLinkAboutM-84-0775Mr. Howard V. Gary
M City Manager
FROM Mi 1 l'er J . Dawkins
City Commissioner
CITY OF MIAM1, FLORIDA
4 � -
INTER.OFFICE MEMORANDUM
July 6, 1984
DATE: FILE:
ITEM FOR THE JULY 30TH COMMISSION
SUBJECT: AGENDA
REFERENCES:
ENCLOSURES:
Please schedule the following item on the July 30, 1984
Commission meeting agenda.
The Martin Luther King Economic Development
Corporation Problems and Solutions.
blp
cc: Mayor and Commissioners
Mr. George Adams _
Mr. Samuel Mason
I
L4
MARTIN' LUTHER KING ECONOMIC DEVELOPMENT CORPORATION
0M TO: COMMISSIONERS
G c o" , gc Ti. Ndams
rgf>pdcniand Chairman
i'!!Arn Cr-„nth May 20, 1984
Vicc
P-!,cr: Retsc,
FOR YOUR INFORMATION
T-ca 'U'c r
M�Ard Members
mbers
Jc,,c Neish
1. c Calhoun
\fx-ha Martin
Vacr! Huston
C�ro!\n Jones
li", Hopkins
F:1,17,lra ll:ces
Ed Puff -le, B-anicr
P. -me C Colim CPA
A M. Cu'mcr. Esq.
5--i-ic' %la,on
F:,.zun%r Duccior
fth,
84-7751
CITY OF MIAMI, FLORIDA
INTER -OFFICE MEMORANDUM
To Jose Garcia -Pedrosa DATE: July 5, 1984 t'tLE:
City ,Attor_nPy
SUBJECT: M (Martin Luther King
Econanic Development
Corporation)
FRoMD:awldns REFERENCES:
City CcT nissioner
ENCLOSURES:
Please revio %, the attached letter frczn Erskine & Fleisher and give m+e your
legal opinion as to whether this law firni's opinion is valid or questionable.
Also, what can v.-- do either way and your suggestions.
sd
cc: Mr. Howard V. Gary
Major George Adams
Mr. Sam Mason
84- 7`•75
a. r
CIT? or N ao't. rL ::4
To Jose Garcia -Pedrosa
City Attorney
` ru - Howard Gary
City Manager
. F:iM Charlotte Gallogly
Director
Department ofEcor omic
Development
INTER -.'OFFICE MEN4C)R **73U?A
LATE- March 19, 1984 rl"r-
SV,IJECT. Legal Opinion on Martin
Lul.her King Economic -
Development Corporation
(MLKEDCO)
AEFERENr-r":
Ef4CLOSURES:
Over the past few weeks, this department has provided information to
Alex Vilarello regarding MLKEDCO. Please provide us with a legal
opinion on' how the City should proceed to conduct business with
1.1LKEDCO and include your recommendations regarding the following
issues:
1. On February 7, 1984, MLKEDCO held its annual meeting. My
concern is that the lenality of this meeting has been ouestione
by certain members of 1LKEDCO.
2. Two different groups are holding themselves to be duly elected
representatives of MLKEDCO. One of these groups is led by Mr.
James Campbell, while the other is led by Mr. George Adams. X
concern is that it is not clear which group is in fact duly
elected.
3. The City entered into a contract with NL�.EDCO on July 1, 1583.
My concern is whether or not the action of February 7, +9114 ha
any impact upon the validity of this contract and whether we it
fact, have a contract with a legally binding entity.
4. Based upon t;LKEDCO's program performance, which has been
satisfactory, the organization is entitled to monthly
reimbursements for certain program expenses identified in our
contract with FILM" DCO. My concern is that it is not clear whi
group holding themselves to'represent N'_?:=DSO should receive
outstanding or future reimbursement funds.
APPROVED- /
•Howar V. Gary
City ijanager
• LAW OVrICC6 -
ERSKINE & FFLEISHER
S'TAMt_EY a EPSPCINE SUITE 251
ANCREW O FLEISMER 9AANETT RANK PE11LD'Mir3
420 LINCOLN AnAP
MIAMI •EACH, FLORIDA 33139
420St 530-t4a*
June 14, 1984
Mr. Howard Gary
City Manager
City of Miami
3500 Pan American Dr.
Miami, Florida 33133 ,
RE: Martin Luther King Economic Development Corp.
(M.L.K.E.D.C.0.)
Our File No. 84-267
Dear Mr. Gary:
Please be advised that the above -stated law firm
represents Martin Luther King Economic Development Corp.
(.M.L.K.E.D.C.O.). This letter is in reference to your com-
munication dated May 29, 1984, forwarded to M.L.K.E.D.C.O.
- Contrary to your assertions, in accordance with
Chapter 607 of t}ie Florida Statutes, the City of Miami does
not have any power or authority whatsoever to direct
M.L.K.E.D.C.O. to convene a meeting and conduct an election
with respect to the Officers and Board of Directors of
M.L.K.E.D.C.O.
From what I understand at this point in time, it
is the concern of certain former disgruntled Board members
that there was an improper election process, and further,
that the corporation did not have the requisite members
qualified under the corporate guidelines. Clearly, your
office has been inadequately advised with respect to suf-
ficient information to make a determination as to whether
or not there was a proper or improper election.
At the last election, all individuals who did in
fact vote at the meeti.nr involved, acknowledged their pre-
sence in writinf;, indicating their residency, and for all
intents and purposes, apparently qualified as members of
the corporation.
FurthCrniOre, Lhe former disgruntled Board members
who contacted your office were present at the time during
the election process. As a matter of fact, they were
,• r
JL
P
el
we
estopped ,end/car otherwise have
the recent mc-o t i nK in I ig ht of
present election process.
waived their right to dispute
their acknoc:iledoment of the
al
A more comp(-11 ing reason exists at this point in
tine as to :hv t IeSe particular individrals gray not complain
wILh res})ect to the election procoss. Pursuant to the
General Corporations Act, r,ny shareholders or individuals
having voting rights within a corporation Echo has a con-
cer-t . as to t:hether or not individuals have the authority to
vote at a meeting, must exhibit or (irmand to review the list
of shareholders entitled to vote at the meeting i-nvolved.
i9ore specifically, the individuals involved ;,lust jrr.,kO a de-
mand upon the officers of the corporation to adjourn any
meeting where they feel that the requisite stock transfer
books h,ve not been kept in proper order during the course
of the meeting. In accord,:nce .,:ith Florida St ,t.ote 60i.091
(S), if no such de:,,and is wade, failure to comply with the
stock transfer records shall not effect the validity of any
action taken at t} at particr.ilar rr;eet1no. It is r,,, under-
standing that the parties involved were well aware of the
proceedings, were pros(-,nt at the proceedings and had the op-
portunity to present their demands accordingly_ The fact
that they did not make the demand at the weeting and at a
much later date, it is clear that the actions taken at the
meeting cannot be contt=sted at this late date.
In s:jmmat1on, it is m. belief that the corporation
in issue is not acting i lit -;all:,. if anvLji n�, these indi
-
vidual Board mer�,b�rs t;ho hive ,ppro,;c}Icd Four office are
acting without authority ,nd subjecting therselves to lia
-
bility for th-ir present lotionsedloss to sa}', if
these Indlv2'd;;C,Is wish t0 pursue tfl,'lr lC'Lcl rr-;?Il'><�les ��alnst
M.L.K.E.D.C.0. t}-,ey ,r,ay do so in a Cr art c.addi-
tion, M.L.K.E.D.C.0. will institute 1w11L3tever judicial mea
-
sures are necessary in the event your office intends to
convene an election of the Board of Directors of M.L.K.E.D.C.O.
Sincerely yours,
Stanley B. Erskine
SBE/ j l
cc: Charlotte Callogly
Samuel Mason
William Smith
84--775-
c i l' cr M.t M'I. Fl;�gt: Jl
INTER -OFFICE
TD Charlotte Gallogly, Director DATE -A-P 140 "1 Pr6
Economic Development
FROM Jose Garc) a -Pedrosa
City Attorney
suejEcT. Disputc concerning Board
of Director of MLKEDCO
REFERENCEVOUr rr,emor andum +Jf
March 19, 11)84
ENCLOSURES.
You have asked us to provide you with a legal opinion on how
the city should proceed to conduct business with the Martin
Luther King Economic Development Corporation (MLKEDCO). Your
inquiry arises from the following facts which you have supplied
to us and which are otherw)se contained in written mater)als also
made available to us:
1. MLKEDCO was organized in September of 1962 by the filing
with the Secretary of State of the State of Florida of its
Articles of Incorporation. Those articles provided for an
initial Board of Directors to manage the affairs of the corp-
oration and, in Article VIII, mandated that such Board of
Directors "shall be annually' elected in February of each ;ear".
2. The Articles of Incorporation also provided for two
classes of members, with specified qualifications and an applica-
tion procedure.
3. The Articles of Incorporation further provided that the
number (but not the term) of the directors could be changed by
amendments to the A'rt icles of Incorporat ion or to the bylaws or
by majority vote at a meeting of m-embers. See Article VI1.
Article XI also provided that the qualifications and voting
rights of members be as set forth in the bylaws.
4. Section 6.03 ("Board Composition") of the by]aws
conflicts with Article VIII of the Articles of Incorporation in
t hat s a i d sect i on at t empts t o set up st aceered three-year t erms
for directors. As already noted, Article VIII of the Articles of
Incorporation mandates annual el' ect)ons and does not permit
amendment of that term by a different provision in the bylaws.
5. ,In February of 1983 there
Lppears to
have been
an
election of board members in accordance
with the requirements
of
the Articles of Incorporation. But
it appears
that membership
application forms were never used and
that the
procedure
for
electing members set forth in Section
4.04 of the
bylaws was
not
fo11owed.
84- 775-
40
Charlotte Gallogly, Director
CconOm)c Oe%,eIopment
-Page 2- April 10, 19E4
G. In February of 1984 there appears to have been another
election of board members, also conducted without adherence to
the requ)remcnts of the Articles of Incorporation or, for that
matter, the bvlaws.
7. Following the February 1984 election, a dispute arose
between the members of th-c two groups, each of which clai.ms to be
the duly elected Board of Directors of MLKEDCO. Both qroups
appareritly claim the right to receive the monthly reimbursements
payable by the city under a contract entered into between the
city and MLKEDCO.
You have asked our adv)ce as to how to proceed.
After reviewing the foregoing facts and documentation
embodying same, we recommend the following procedure:
1. Do not disburse any monies to anyone until and unless
the internal dispute of MLKEDCO is resolved, preferably by court
order, since there is substantial doubt as to which group, if
either, constitutes the Board of Directors charged with the
responsibility of rr,anaging the affairs of MLKEDCO.
2. In the event that you wish to force a resolution, the
city may file what is known as a suit in interpleader, pursuant
to the provisions of Rule 1.240 of the Florida Rules of Civil
Procedure. Such a suit would be brought by the city as the party
plaintiff against all other interested parties and entities as
parties defendant; the city's position would be that of a
stakeholder, requiring the defendants to litigate between or
among themselves their entitlement to the monies otherwise
payable by the city. At the conclusion of that lawsuit, the
court would resolve the dispute, permitting the city to make
payment in accordance with that resolution.
I wish to remind you, however, that at its March 2 9 t h
meeting the Ccmmission voted, upon a motion made by Commissioner
Dawkins, not to Fund any litigation arising out of this dispute.
If ]t is decided by the city to file an interpleader action, I
would recommend that the Commission be asked to clarify whether
such a course of conduct conforms to the intent of that motion.
JGP/mm
cc: Honorable Mayor and Members
of the City Commission
Howard V. Gary
City Manager ,
84-75 'T