Appointments to Evade Recall
Adams Stirling PLC


QUESTION: We submitted a petition to recall the board and they immediately appointed new directors to replace themselves. They claim that a new board new exists and the recall is moot. We believe they will let recall emotions cool and have their appointees resign and reappoint the original directors back onto the board. Is that legal?

ANSWER: I would consider such actions a subversion of the recall process. I suspect a judge would agree. The difference between this and an intervening election is the method of replacement. With an election, the membership selects a board of their choosing. That process is undermined when a board refuses to proceed with a recall because it, rather than the membership, selected their replacements.

Problem With Appointments
. With appointments, the membership has no say in the matter, which leaves matters unresolved. If the membership removes the board, they have the opportunity to select the replacements. In my opinion, under these conditions the recall petition remains valid and the recall election moves forward despite the appointment of new directors by the targets of the recall. Only if the petitioners are satisfied with the appointments and withdraw their petition can the recall be avoided.

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Adams Stirling PLC