But at the last annual meeting on Sept. 23, coalition members say, the board announced that only two of the five board seats were up for election. The coalition members said all five seats should be filled by election; they did not agree to the board's terms and did not submit their original proxies to be counted.
Last month, East Palo Alto resident Irene Laudeman — who, by proxy, holds nearly 700 shares of the water company — filed a lawsuit with the San Mateo County Superior Court, asking for the court to require the water company board to hold a special meeting at which all board members would be up for election.
In a court order issued March 28, the San Mateo County Superior Court directed the water company to hold a shareholders' meeting sometime between May 4 and 11, during which members will be permitted to elect a new board.
In the meantime, at the request of attorney Vikram Subramanian of SAC Attorneys, who represents the Palo Alto Park Mutual Water Company, the court has also agreed to hold a hearing to evaluate a number of shareholder proxies the water company alleges contain "irregularities" that may make them invalid. The water company alleges that a number of the proxies were marked with printed names instead of signatures; that three of the proxies had been forged; and that the coalition's withholding of the original proxies went against the water company's practices.
"The other party doing this petition with all the proxies didn't submit the proxies to the company secretary," said Vikram Subramanian. "There's a bylaw that says that these sort of documents need to be submitted directly to the secretary to review. They were never submitted."
Judge Gerald Buchwald ordered that the evidentiary hearing be held April 18.
The March 28 ruling by Judge Susan Greenberg ordered the shareholder meeting be held and noted that even by omitting the three allegedly forged proxies, Ms. Laudeman still has more than the 10 percent of representative proxies and shares needed to call a special meeting, and that there is nothing in the company bylaws that laid out protocols relating to the proxies.
The ruling also dismissed the defense's claims that the proxy forms did not have Spanish translations; in fact, the translations were on the reverse side of the proxy forms.
The ruling also noted shareholders can remove directors at any time, according to state corporation code, and absent bylaws dictating how to replace those seats, it would be up to a shareholder vote. One exception, the ruling notes, is when a board vacancy is the result of a death, a resignation or the inability to serve, in which cases remaining board members can fill the position.
"If that's the will of the court and what the people want, the board of directors is ready to go to an election," Mr. Subramanian said. "They're prepared to win an election straight and fair."
The evidentiary hearing is set for 9 a.m. on Wednesday, April 18, in the San Mateo County Superior Court.
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