How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask ScottyMacESQ Your Own Question
ScottyMacESQ
ScottyMacESQ, Lawyer
Category: Real Estate Law
Satisfied Customers: 15743
Experience:  Licensed General Practice Attorney, Texas
19487448
Type Your Real Estate Law Question Here...
ScottyMacESQ is online now
A new question is answered every 9 seconds

I need a legal opinion on this corporate bylaw: Article

Customer Question

I need a legal opinion on this corporate bylaw:
Article VI Section 8. Vacancies. A vacancy occurring in the Board of Directors may be filled by a majority vote of the remaining directors, though less than a quorum, as defined in Article VII, Section 6, below, or by the sole remaining director; a vacancy created by an increase in the authorized number of directors shall be filled by the Board of Directors or at a special meeting of members called for that purpose. A director elected to fill a vacancy serves the unexpired term of his/her predecessor, or, if the director has no predecessor, until the next meeting at which directors are regularly elected.
I would like a definitive opinion, notwithstanding any other provisions, but just examining this bylaw on its own. There has been no vote to expand the board but a vacancy has been created on the board because a directors term has expired. Does this bylaw empower the board to re-elect that same director to fill the vacancy created by his term expiration - where he is his own predecessor?
Submitted: 1 year ago.
Category: Real Estate Law
Expert:  ScottyMacESQ replied 1 year ago.
Thank you for using JustAnswer.
Yes, it does. There's no prohibition here or in the law that says that someone cannot be his/her own successor, and as it would be a vacancy, it could be filled by a majority vote by the remaining directors.
The "predecessor" language means when someone vacates prior to the expiration of his/her term, because the term to be served would be the unexpired term. That doesn't apply in a situation where someone serves the full term. In such a matter, only the first part would apply.
Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, ***** ***** luck to you!
Customer: replied 1 year ago.
HI Scotty, I would like you to reconsider this opinion. I really can't see any provision for this law to be interpreted this way. This is my reading of it:
A vacancy can occur for two reasons:1) An increase in board size, in which case there is no predecessor and new director serves until the next members meeting. This did not happen.2) A current director leaves, in which case the new director serves the unexpired term of his/her predecessor. In the case of replacing themselves, the unexpired term would be zero.Perhaps it was too restrictive to expect you to opine without seeing the rest of the bylaws. I have attached them here.
Expert:  ScottyMacESQ replied 1 year ago.
Legally a board of directors can elect a director on for another term. That's the default rule. Now that can be restricted by the bylaws. But a restriction of such a sort would have to be clear and unambiguous. That is, it would have to say "directors cannot serve consecutive terms" or something like that. The bylaws have to LIMIT it, not authorize it.
But I don't just see this as a "silent" provision. I see a third way that a "vacancy" could arise (at the end of a term).
This bylaw indicates that there's an "authorized" number of directors. When one person reaches the end of his/her term, that would create a vacancy if he/she did not return. This clause does not indicate that there's ONLY two ways that a vacancy could occur.
Look at it this way: if the director LEFT at the end of his term, that would be a vacancy. The remaining time would still be zero. But this is still clearly a vacancy (not one of the two that you mentioned), and can be filled in accordance with the first part of section 8.
Hope that clears things up a bit. If you have any other questions, please let me know. If not, and you have not yet, please rate my answer AND press the "submit" button, if applicable. Please note that I don't get any credit for my answer unless and until you rate it a 3, 4, 5 (good or better). Thank you, ***** ***** luck to you!
Expert:  ScottyMacESQ replied 1 year ago.
Did you have any other questions before you rate this answer?