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New
Jersey Court Again Nullifies USET Corporate Actions
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After
hearing oral argument, the Superior Court of New Jersey today
granted summary judgment in favor of Alan Balch, the President
of USA Equestrian, the National Equestrian Federation of the United
States, declaring that the new bylaws which were adopted by the
United States Equestrian Team in September and October 2001 are
null and void.
In
February 2001, the USET filed a Challenge with the United States
Olympic Committee (USOC), seeking to replace the Federation as
the National Governing Body for equestrian sport. Under the federal
Amateur Sports Act and USOC precedents, an organization cannot
file or maintain a challenge unless appropriate internal corporate
governance documents are in place within one year after the end
of the prior Olympic games. In March 2001, the USET began efforts
to amend its bylaws to support its Challenge. Mr. Balch, acting
in his capacity as an ex officio trustee of the USET, filed a
lawsuit challenging the validity of the corporate actions taken
by the USET. In August 2001, the New Jersey Court declared the
USET's actions to be null and void because they violated New Jersey
law as well as the USET's own corporate charter and bylaws.
Despite
the ruling of August 2001 the Board of Trustees of the USET again
purported to adopt amended bylaws on September 28, 2001. At the
USET's annual meeting of October 10, 2001, a vote was taken to
ratify the adoption of the new bylaws. After mediation efforts
failed to resolve the Challenge, Mr. Balch filed another lawsuit
to challenge the validity of the USET's corporate actions in September
and October 2001.
Today,
the New Jersey Court ruled that the USET had once again violated
New Jersey law and its own corporate charter when the Board of
Trustees adopted new bylaws on September 28, 2001. The Court also
declared that all actions taken at the annual meeting on October
10, 2001 - including the ratification of the newly adopted bylaws
- are null and void because the proxy solicitation issued by USET
management failed to disclose that a ratification vote would take
place, and thus was false and misleading.
In
addition, the New Jersey Court observed: "As the record demonstrates,
Mr. Balch did everything he could to avoid this lawsuit, but the
USET persisted in thumbing its nose at the rulings of this Court
in the first lawsuit, defiantly repeating the very same conduct
for which it had been rebuked, even to the point of attempting
to resurrect acts which this Court had nullified." As a result,
the Court ordered the USET to reimburse Mr. Balch for the fees
and expenses he incurred in obtaining today's rulings.
USA
Equestrian Inc., as the National Equestrian Federation of the
U.S., is the regulatory body for the Olympic and World Championship
sports of dressage, driving, endurance, eventing, reining, show
jumping, and vaulting, as well as 19 other breeds and disciplines
of equestrian competition. As
the country's largest multi-breed organization, the Federation
has over 80,000 members and recognizes more than 2,800 competitions
nationwide each year. It governs all aspects of competition, including
educating and licensing all judges, stewards, and technical delegates
who officiate at these shows.
VISION STATEMENT
The vision of USA Equestrian is to provide leadership for equestrian
sport in the United States of America, promoting the pursuit of
excellence from the grass roots to the Olympic Games, based on
a foundation of fair, safe competition and the welfare of its
horses, and embracing this vision, to be the best national equestrian
federation in the world.
www.equestrian.org
.
