SC law reguar 2nd & 3rd Proxy legal procedures

We recently had an election and annual meeting that was appalling and a disaster. Bar room brawls are probably better behaved to say the least. We have been after the board for about a year and have cornered them about "conflicts of interest", "excessive use of reserves", "use of funds that violate tax codes" and MOST importantly their controlling of proxies (by default the proxy is awarded to the MC if you choose not to select a candidate).

So needless to say the incumbents are back in and here is how and I need help with SC law if anyone knows.
1. "FIRST PROXY" was mailed USPS and emailed to the members - I for one and others did not get email and I was a candidate they have my email. I also informed them that I would not be present.
2. 2 1/2 weeks to go and all is quite, I announce that I will be present and now they scramble because quorum has not been met which we suspect has been the case for many years. So a "2nd PROXY" (clearly stated on proxy) is emailed to some members and again not everyone received it including me.
3. 1 week to go and a "3rd PROXY" (clearly stated on proxy) is emailed - again not to all members. They argued that it was and email blast and not a "3rd PROXY".

I plan on challenging it and here is why:
- for many many years they have just met or barely exceeded quorum (which we suspect they haven't - this is first year someone is questioning)
- this year they achieved 80%, the best year ever in only 2 weeks - Amazing!
- the incumbents achieved record number of votes ever that blew away all candidates - Amazing!
- they only had 2 members review a handful of proxies
- we believe they doubled up on proxies previously submitted

Any help on approach with law to challenge this would be greatly appreciated.

A notice is required. How the notice is delivered is up to the Board. The Board only has to ensure a noticed was sent to each member once. Typically e-mail is a courtesy or an alternative method of delivery over the USPS. Some States require a members prior approval before using e-mail as the alternative delivery method.


Can't challenge this years election based on previous years. If a quorum was met, it was met.
If no quorum was met, then the same Directors stay in office (see statute quoted in earlier post)


Great, you had a quorum. Hence, business could be conducted and an election held.
Ruins any challenge on not meeting quorum.


If you don't believe the vote count, ask for a recount and be present when the recount is done.


It's typical for only 1 or 2 individuals to review proxies.

Statute, SC SECTION 33-31-724 and SC SECTION 33-31-727, basically says that unless there is reason to suspect fraud, if the signed name matches the name of the member on record, then the proxy can (and should) be accepted.


Again, ask to review the records and have a recount. You can then verify the proxies yourself to see if any should have been dismissed.

If your recount produces the same winners or the lack of a quorum, then, to be blunt, the result would have been the same. The difference is that you would have had the opportunity to verify the count yourself and, perhaps, gain some peace of mind.

If your recount produces different winners, and the Board refuses to accept the recount, you will need to take the issue through the courts to challenge the election results. This is effectively stated in SECTION 33-31-727: "(e) Corporate action based on the acceptance or rejection of a vote, consent, waiver, or proxy appointment under this section is valid unless a court of competent jurisdiction determines otherwise." Obviously, such a challenge is expensive.

Another option is to mount a recall (which may be quicker and less expensive).

The last option would be to let the results stand and plan a better strategy for next year. Gather support (and volunteers) to be an impartial election committee, and send out your own proxy form.

I know that this isn't what you really wanted to hear.
I hope it helps,

Tim