Petition for a special meeting of the members

You have to do what your governing documents, bylaws, and state laws require you to do. It the petition was prepared and signatures gathered in accordance with those documents, then you have to follow them. Otherwise, I'll bet your documents say the homeowners can call the meeting without you. They can also remove the board members, not re-elect them in the future, take you to court, or any other remedies that are available to them.

The difference between a board meeting and a special meeting of the association members is that the association members can't vote at a board meeting, so a board meeting is an unacceptable alternative when a special meeting has been requested (demanded?). If the homeowners are angry with the board, don't make the situation worse. However, the agenda for the special meeting has to be specific to the issue raised in the petition.

Besides, what good would avoiding the issue do anyway?

We had a special meeting called this way. We had 45 days from the day the petition was given to us to call the special meeting. I am the Secretary and did I ever have a lot of work to do to prepare for this meeting.
We had a vote on allowing pets in the building. The pro pet votes lost. That was a couple of months ago. To this day, people are saying the Board arranged the vote to go like it did. There were only 34 units voting out of 43 and they said that wasn't 100%. I explained and explained that some proxies were not returned, there is no way it could be 100%. So next time we will add the yeah's nay's and not returned so everyone can see the total. We even had someone not on the Board help us count the vote. Adding those percentages required by our state law is very time consuming.
You might ask the board to get you the total as yeas, nays, and not returned so that there will not be a question about the Board messing with the votes.
We were so very careful and still accused of wrongdoing.

Natalie,

From your description, there shouldn't be anything to hide, so why would the president and secretary have any reason to try to get out of calling a special meeting of the homeowners? Still, your governing documents should be complied with. Although there doesn't appear to be anything to be voted on in the petition, something may arise during the special meeting that could result in a motion that would require a vote.

What insurance coverage are the homeowners interested in? I doubt it's the D&O insurance, since it doesn't affect the homeowners directly. Is it the association's liability insurance? Are your homeowners in a multi-unit dwelling condo and they're concerned about the master policy?

Regarding the actions taken by the MC with regard to the builder, this sounds to me like you recently went through transition. Is this the case? IMO, the MC has little to do with transition. That should be between the BOD and the builder, and the association should have their own attorney overseeing the process. In my view, transition is akin to an individual purchasing a home. When buying a home a buyer should have an attorney representing the buyer's interests, and during transition, the homeowners should have an attorney representing the homowners' interests. Although no money is transfered, the homeowners are, in effect, "purchasing" the common elements and the homeowners association from the builder.

Natalie,

From your previous posts, a picture is beginning to emerge.

It appears you may still be under developer control, albeit a new developer. When the new developer "allowed" homeowners to be elected to the board, was there an actual election held? Is there now a majority of homeowners on the board, or is the majority of the board still comprised of members appointed by the developer? Who holds the offices of president and secretary?

If the petition is legal (in compliance with your documents) and if it requests a special meeting of the homeowners, then that's what should be done. From what you've posted, I can't understand why the president and secretary would want to substitute a board meeting instead.

I don't think the new developer can be held responsible for the events of the past, nor is it likely that he can explain them. It appears your association was running for a period of time with no board, no budget, and no accountability, except for the management company trying to keep everything together and keep the association itself from going bankrupt.

Nobody can change the past, and trying to piece together how you got from there to here is only good for the lessons it teaches to prevent such events from happening again. Trying to fix blame is only worthwhile if you can recover costs from those at fault. The one at fault is the first builder, and nobody can recover costs from him because he went bankrupt.

What needs to be done is to start fresh. Establish a sensible budget, hire a new attorney and management company, and start from the beginning. Once you are under homeowner control you will be able to do that. That is probably best left up to the board and is not a task for the general membership to handle. To borrow from an old saying, you don't want too many cooks in the kitchen.