VFC Violations of Washington Securities Law
Rory Bowman
could explain to her directly what a great lawyer she is. Attached
please find a brief handout I have prepared regarding VFC's current
status under Washington law and why you all are legally obligated to
return owner share payments under RCW 24.06.
The way that your share agreement was written is as a contract, which
has never been accepted by the corporation. The reason I did not do
this when I was secretary was because our Articles of Incorporation
did not allow us to issue shares, and one of the things which I
emphasized to Heather when she agreed to become secretary upon my
resignation from the board was the importance of accepting those share
agreements, adopting bylaws and issuing shares. By not doing these
things you all are in a bit of a pickle, because (A) you have accepted
money for shares which (B) have never been issued and (C) are to be
bound only by bylaws "to be adopted at a meeting of owners subsequent
to incorporation." Given that such bylaws were never adopted, you are
legally bound to return all owner equity received six months or more
ago.
As a CPA and a corporate officer, Rustin should prepare to issue
checks, unless your lawyer tells you otherwise. You know that judges
trump lawyers, yes? Having been advised of this via attachment, I
would strongly suggest that you have a second lawyer assess to what
extent you may trust in the "reasonable person" standard, given that
VFC is now in possession of almost $30,000 of owner equity for which
no share certificates have been issued and for which no completed
share subscription agreements are on file.
- Rory
Rory
paid on his behalf by VFC, CPA Rustin Brewer appeared in court this
afternoon as regards small claims case 29694 SC claiming that he had
no authority to represent the corporation. Given this assertion,
Brewer was instructed to return to the board of directors and send
someone who did have such authority. The case has thus been set aside
until 1pm on Monday, 24 November, 2008.
The gist of the claim against VFC is
1. That VFC has accepted share payments toward a grocery in west
Vancouver
2. That VFC did so when its own articles (section six) forbade it to
issue shares and
3. Such shares have never been issued
Although the board unilaterally adopted bylaws which asserted it could
issue shares solely at its own discretion, this is not what signed
share agreements or RCW 24.06.070 assert.
CPA Rustin Brewer is currently corporate treasurer for an organization
which is in violation of RCW 24.06 and state securities law. His
claims of ignorance are no defense.
Glenna Rose
up in court saying he has no authority to represent the co-op, that
the board of directors, of which he is a member, must appoint someone
seems beyond absurd to me!
If the board can vote to terminate a board member, vote to pass
questionable bylaws, and vote to terminate a member all in one day;
why can they not select a representative for Small Claims Court in two
months? It would seem logical that the treasurer which is Rustin's
official title, would be the selected representative. Wonder what the
judge was thinking about his "non- representative" status. Since this
hearing was been scheduled, there have been at least two formal board
meetings. In addition to those meetings where others can actually see
what is happening, the board has met, voted, etc., behind their email
addresses for many months. They couldn't take care of this matter?
To quote a long-time officer, I am confused. How is it that the board
could have not appointed, elected, chosen someone to represent them
between August and today? It seems that Rustin was under the illusion
that by him showing up and saying he was not responsible that the
judge would say, "That's okay, you don't need to pay." Ya think?
Oh, me thinks the judge was a bit annoyed with him given he was served
as treasurer of Vancouver Food Cooperative, was sitting in her court
and saying he couldn't represent the co-op and, when asked who would
chose he said the board of directors and then admitted he was one of
board of directors.
Oh, well.
They have had ample time and opportunity to address this for
resolution at Monday's hearing. One can only speculate at their
competency in matters involving corporation law at the state level as
well as security issues. A review of cash on hand clearly shows
irresponsible handling of owner equity. Anyone else notice they no
longer report cash on hand at board meetings? Perhaps because of the
thousands of dollars of shortfall in spite of generous grants and
fundraising. To say this is very sad is truly an understatement.
What else can we expect from a board of directors that files a false
police report in behalf of the owners? Since Rustin was one of two
directors who filed that report, one can only wonder if the entire
board voted to include the items that were in that report or if they
even knew prior to the October meeting when I aired the dirty laundry.
I am truly confused as to how Rustin can represent the co-op to file
a false police report but tell a judge he cannot represent the same
organization in Small Claims Court.
==============
--
---<-@ Glenna Rose @->---
I cannot change the world, but I can make my little corner better.
Rory
Vancouver Food Cooperative
1701 Broadway, #B
Vancouver WA 98663
Thank you for your certified letter of 6 November, 2008, but you seem
to willfully misunderstand the nature of my small claims case and the
question at law. I was not requesting a simple refund of my share
payment but asserting that Vancouver Food Cooperative is in illegal
possession of all owner equity, with no legal right to retain any of
it. VFC is in violation of its own share agreements and RCW 24.06. It
may also be in violation of state securities law. Your self-serving
assertion that writing me a check for $180 will settle the case is
silly. Minimum monetary damages currently stand at $225 with filing
and service fees, but the real issue is your false representations and
conversion of owner equity.
If the board were to perform its due diligence under the reasonable
person standard, it would note several clear and indisputable facts.
First among these is that it accepted and deposited money for shares
prior to January, 2008, when its articles of incorporation clearly
forbade it from issuing such shares. Second, it will note that all
share subscriptions take the form of a contract, which it has failed
to to sign or accept. Third, it would not that this contract is
subject to bylaws adopted by owner vote, which has never happened.
Fourth, it might review RCW 24.06.080 and find that it has never
issued share certificates as legally required. The board has no legal
right to retain such money at its sole discretion, as it asserted in
its bylaws vote of late August, which prompted my claim.
Not only does the VFC board seem to lack the moral courage to address
past errors and omissions. It also lacks the technical competence to
fulfill past promises, as is indicated by its gross failures in
business planning, volunteer retention and owner recruitment.
My small claims suit, as it now stands, is for $225 and a letter to
all VFC "owners" advising them that they are legally entitled to a
full refund of all share payments made.
VFC was a hobby project by two unemployable housewives. It is time for
the current board to admit this, and fold the tent. Enclosed please
find your voided check, #1068.
In honest cooperation,
Rory Bowman, plaintiff
Small claims case 29694
Rory
small claims court, with no requirement whatsoever to fill out the
bogus "request for refund" forms that the board invented and by which
they claim the right to retain owner money at their sole discretion.
Anyone else who submitted a share agreement form between June 2007 and
September 2008 should similarly be entitled to a full refund.
The $229 included my original $180, the $29 small claims filing fee
and a $20 service fee paid to the sheriff's office to serve corporate
officer Rustin Brewer, CPA, at Caley & Associates, 2102 East
McLoughlin Blvd, 98661.
What this means is (a) that upon payment I shall no longer be a VFC
owner and (b) that anyone else is legally entitled to a full refund of
their full share payment without filling out any silly forms the board
may invent.