In writing this blog my intent is to be factual as possible and provide important information for the membership that they may not have the time or inclination to track on their own. Part and parcel keeping things factual is that I only use publicly sourced information or information from sources which I believe have direct knowledge of the issue and are reliable.
With the publication of the second workbook for the 2018 ABC District convention a number of concerns have been identified that I’d like to address here.
As a disclaimer – I’m not a lawyer, this is not a legal opinion, and is pure speculation on my part based on my experience reading and writing about church structure. If you need an binding legal opinion please contact your local counsel’s office, pay their fee, and see what they say.
Continuing – members of the CEF Forum have noted:
- The financials for the past three years are not audited
- The expense side of the profit/loss statement for Feb 2017 to Jan 2018 is stated twice
- The income side is missing.
- The balance sheet is missing.
I’d add that failing to report audited financials is a huge red flag that was ignored when CEF was still operational. That it’s happening here again is great cause for concern.
Then there’s the matter of the proposed bylaws:
Please note that we have chosen the wording of these bylaws to make it clear that the District is not continuing as a church body or as a professional organization, but that it is still an organization of congregations with legal obligations. On account of these legal obligations, these Bylaws have been vetted by lawyers, a process that has taken some time and has resulted in the late arrival of this document.
I expect the lawyers District retained to vet this document worked to benefit District, not the membership. That may explain the reason why the proposed Bylaw 5 is written thus:
5. Membership. Members of the Corporation shall be all congregations (and rostered clergy and deacons) that were members of LCC in the Provinces of Alberta and British Columbia as of the date of the last LCC Convention, May 22, 2015 (the “Members”). Members may be required to make payments to offset costs incurred by the Corporation as it winds up its operations.
District will lose its source of funding as of Jan 1, 2019 which means if it needs more money to fund its legal suits it’ll have to find it somewhere else, and the easiest “somewhere else” is the current membership.
What makes this proposed bylaw extremely questionable is nothing I’ve ever read has even hinted at a jointly-liable relationship between District and its members. Synod’s documents have always emphasized that the relationship between Synod, Districts, and its clergy / deacon members was voluntary and that the only recourse Synod had for errant behavior was admonishment, suspension, and expulsion. Nothing about fines and/or joint legal liability.
In addition, LCC the Synod has also successfully argued that it was distinct and separate from the Districts and therefor not on the hook for ABC District’s liabilities in the CCAA proceeding.
I expect the same is true of the relationship between District and its members. That doesn’t mean there isn’t some kind of joint liability in established corporate law. Whatever the case may be – the lawyer that vetted this document needs provide the legal case law and authority to support this notion of joint liability between District and it’s members.
Other concerns I’ve seen raised include:
- Financials do not include CEF / DIL numbers
- Members meetings will only happen every 4 years instead of every year
- Concerns that Board members have unlimited powers – this isn’t true as existing law lays out expectations for Board members behavior which limits what they can and cannot do and the liability they’ll attract if they step out of bounds.
- District will indemnify all Board members of liability – this kind of indemnity is standard for Board members and is generally covered under D&O insurance. This indemnity is not unlimited – Board members cannot do whatever they want without implication – as no-doubt the past Board members will soon learn.
- Lack of appropriate notice – this is a tactic I’ve seen multiple times –
- submit a vital must-pass proposal late in the game,
- don’t give the members time to properly consider it
- they pass it trusting the people that submitted the change –
- then they find out that their trust has been taken advantage of and they adopted a motion they would’ve never agreed to if they had been properly informed.
- This lack of notice also prevents member congregations et al from completing the necessary procedural steps required to resign from District / Synod as many of them have delays in the process in order to give Synod notice that they are leaving.
Clearly there is cause for concern and these questions need to be addressed by the Board and the District members. Maybe this is all a big understanding, maybe it’s not.
The only way to tell is to get it out in the open and hash things out.
ANO / Lutheran Watch 