—Quorum-less in New Brunswick
“The existing board members appear to be failing to fulfill their fiduciary duties. Therefore, at the outset, you and other members/shareholders should notify those board members that you are considering pursuing claims for breach of fiduciary duty. This, at least, may prompt the board members to take necessary action to perform their duties or resign.
“Unfortunately, neither the Nonprofit Act, nor the Corporation Act provides a mechanism for conducting a meeting without a quorum. However, there are other mechanisms you may use to satisfy the quorum requirement, hold an election and obtain a functioning board. Pursuant to both the Nonprofit Act and the Corporation Act, if by resignation or other cause, there are no trustees in office, any member upon proper notice may call a special meeting of the members for the election of trustees. The association/corporation may then be successful in obtaining a quorum at the special meeting if it uses proxy voting. Proxy voting allows a member/shareholder to designate another person to cast his/her vote using a signed form or letter.
A proxy form can be included in the notice of special meeting. Shareholders/members can go door-to-door in an attempt to collect the proxies. If you have a few dedicated volunteers, obtaining the proxies combined with calling the special meeting may be the most effective method of achieving the quorum requirement.
“As a last resort, New Jersey courts of equity may affect corporate decision-making. For example, New Jersey courts have exercised their power in altering a board of directors’ decisions by setting a vote aside and ordering a new one. In more extreme circumstances, New Jersey courts of equity have intervened in corporate affairs in the absence of a properly constituted board. Therefore, if you have no other recourse, you may petition the housing court, if it is the proper forum, to appoint a receiver to conduct the affairs of the association/corporation.”