History of WHIMOA
Chronology of WHIMOA TURNOVER events. 6 Apr 2005
This is for the benefit of those owners that have recently bought into the moorage (over the past 1 – 1 ½ years) and for those whose memories lapse after 24 hours.
Notice I used the term TURNOVER not TAKEOVER. Takeover is a hostile term that has the connotation of one party taking something away from the other (i.e. Class A owners taking the association away from the LLC), while Turnover is an amenable solution to a process of transferring control.
In September 2002, Ken Eagon et al, HIAO LLC, asked Mike Williams, Becky Goss, Pat Buescher, John LeDoux, and Joel Knowling to be on a transition committee to effect a turnover of WHIMOA to the Class A members. (Please read your By-Laws and CC&Rs)
We all agreed and met with the LLC on 20 Sep 2002. Many items of interest were discussed but of significance was two areas. First we presented the LLC with a list of issues that were a problem in the moorage. Some of the items on the list were mechanical (i.e. West end ramp, etc) in nature and some were operational (i.e. adherence to CCRs etc.) in nature. The second area concerned the makeup of the transitional committee. We identified the first as not all inclusive and requested additional time to finalize the list. Regarding the transitional committee, we felt that we (those listed above) could not act in good faith for the Class A owners without first being voted by our peers to perform this duty. The LLC agreed to work with whomever the Class A members voted to be on the transition committee. The LLC began work on correcting some of the mechanical issues on our list.
On September 27, 2002 a second meeting between the above appointed transition committee and the LLC took place. Of most importance was the review of the WHIMOA books by Pat Buescher. It identified that up to that point the majority of all expenses were combined with the LLC as a matter of convenience. The convenience being that up to the beginning of 2002, the vast majority of the slips were owned by the LLC and the LLC just paid for all the expenses of operating the moorage. For the year 2001 the books were separated by the accountants and the current books reflect that transition. Other discussion took place on the progress of the mechanical repairs.
On October 10, 2002, a meeting of the Class A members was held at Damons. Of significance is the vote of the Class A members electing individuals to be part of the turnover transition committee.
In the balance of 2002 and most of 2003 this transition committee, met with the LLC once a month. Mostly to get a status report of how the fixes were going and to find out information about the operation of the association. During the latter part of 2003, nomination, and elections were being prepared for a turnover by Jan of 2004. With some dissention and typical mis-information being spread, the election and turnover became mute because the LLC did not follow through with their part of the turnover.
I attended one more meeting and informed the LLC that until such time as they were truly serious about transferring control of the Association to the Class A owners, that I had no intention of attending or supporting their position.
In October 2004, I was contacted by Gale Oldham, HIAO LLC member wanting to re-energize the transfer of control of the Association. I provided Gale and Ken with a set of processes and procedures necessary to follow in accordance with the CC&R and especially the By-laws. They set dates and times and agreed to meet the timeline which would cause the process to take place over a 3 ½ month time to be turned over in January 2005. It also outlined several announcements and meetings to offer explanation to curious owners. Again, Ken let the process falter and did not follow through.
Again, I was contacted by Gale. This time in January 2005. He asked me to assist one more time. I said I would participate under one condition: that condition was that Ken Eagon was forced to a strict schedule and that if I thought he was not following the schedule that I could count on Gale to become directly active in the process. Gale agreed and we had a preliminary meeting in February between Gale, Ken and myself. The same process and procedures were provided to the LLC but with a tightened schedule. The schedule was based on meeting the minimum notifications as outlined in the By-Laws and did not account for any of the luxuries of informative meetings. The process also changed from a transition through the committee to a legal method of transferring control from the LLC to a board of directors duly elected by the Class A members. The process and procedures were presented to their attorney and approved to be in accordance with state law and the Association By-Laws.
I have been personally embarrassed by the LLC’s inaction on at least two occasions. I must say, I don’t think this is a reflection of all the members of the LLC and may only reflect on an individuals incompetence. To ensure a transition was forced to take place in the near future, Walt LeDoux, #22 and I enquired about how many slips remained under the control of the LLC. We were informed there were 7 slips that did not have any legal action on and 4 that either had some promise to a buyer or that just had not closed. Based on the By-laws, the management and control of the Association must be turned over to the Class A members within 120 days after the last slip is sold. With this knowledge, Walt and I made an offer to the LLC to purchase the seven remaining slips. A counter was offered that would allow the LLC to close sales on 4 slips by 1 April 2005 with any remaining slips unsold at close of business that day to be closed with Walt and myself on the 4th. There was also a contingency issue on Slip 38 that was identified by the LLC representatives as Ken Eagon’s. In other words it was not for sale even though it was shown on the official records as belonging to the LLC. We re-countered the offer by adding Ken’s slip as a separate purchase offer and as being mandatory to the whole deal. The offer was accepted and as of 4 April 2005 all slips have been officially sold. Four of the slips were officially closed by individual owners prior to 1 April and the two remaining slips were closed on 4 April by Walt and myself. Ken Eagon still holds and controls ownership of slip 38 of which Walt and myself have first right agreement to purchase the slip. This whole transaction was done to ensure that within 120 days of 4 April, anyone in the moorage could notify the LLC that under all legal rights the association control must be turned over. I grant you that if that happened, the LLC may take the position that Slip 38 is still owned by the LLC and therefore the turnover is not mandatory. However, this also gives the Class A owners a legal position to take a stand.
I agree that the $50,000 will not cover any catastrophic event, but that is why we have insurance. However, it will cover some of the maintenance that is a cause of normal wear and tear, and it will pay for the arrears. Also from a business perspective, there are times when one can evaluate a decision as being reasonable. My perspective is that the moorage has been around and basically complete since 1997. Most statute of limitations run out before 7 years with a few exceptions that carry out to 7 years. There are some that are indefinite, but I think those carry a capital punishment penalty with them. It is now 2005, which means it has been over 7 years. Many of us have lived in, or been a part of, this moorage for over 3 years. We have seen what works, what is broke, what needs fixing and the general stability of the moorage. Common sense tells me that we have a very good moorage with one major exception, that exception is how it is being managed. Also, in my estimation of the stability of the moorage, I do not envision any catastrophic failures that could be definitely pointed at the incompetence of the LLC. So in my estimation, by agreeing to sign the release, what we are doing is getting $50,000 in exchange for minimal risk. However, if we don’t agree to sign the release, and the turnover is accomplished through the use of the 120 day turnover period, the association will have a debt of $24K+ which we will all be responsible for. The real net difference is $74K+ and that is not fuzzy math.
The most important part is this will give us the opportunity to control our own environment, clean up the function of the association, and get back to being one big happy water loving community.
There are some rumors that this is just a ploy by the two LeDoux’s to make a big killing or that there is something underhanded going on. Look at it this way, Walt and I were in a position to force the LLC’s hand. We did. We did it because we are tired of how the association has been run. However, we also took a large risk. The only slips left were on the back side in between the two walks. The least desirable and of course the last to sell. If we were somehow stuck with all 7 slips we could have been out $285 per month per slip until sold. Knowing that Ken had made a gentleman’s offer to 4 buyers just meant that it would force those buyers and Ken to complete their informal deals. Also knowing this we also assumed we would only be on the hook for 3 slips. So if you look at this whole thing, I would hardly say that we are in any position to make a killing. There is no sleeping in the same bed with the LLC. It was a business decision that from our perspective was doable, affordable and will eventually make the moorage life better.
Rest assured that if this turnover does not happen for some reason on the 17th, I will be the first one in the courthouse on 1 Aug 2005 to force the turnover.
Respectfully Submitted
John LeDoux Slip #10