observations by Betsy Anderson of the leter received from the trustees of EO

Numbers of Signed Up Members

The concept of signed-up members should be straightforward. Especially in the context of voting members. People who are not current, paid-up members, aren't members. They can't vote.

And, logically, Kevin and Lizelle are asking for current voting members. They stated a purpose to communicate with signed-up members. It should be obvious that the interest is active and voting members, not an historical survey of everyone who has been a signed-up member in the last ten years.

For several reasons, confusion and complications might seem beneficial to EO.

There is an AGM set for 21 February. Bringing an application on the Section 116 request has delayed any decision on it until the March 20 hearing date, which means signed-up members cannot communicate directly until long after the meeting.

For certain purposes, EO might like to say that it has a large number of signed-up members. Under current rules, 10 percent of members must get together to, for instance, call for a general meeting, or bring a special resolution or vote of no confidence. EO imposes a larger hurdle to any such action if it says that EO has 480 signed-up members (the high number EO has mentioned).

But for other purposes -- like numbers of members actually entitled to vote -- EO might like to have a smaller number. For this reason, EO may like to say that it has 189 signed-up members (the low number EO has mentioned). And, perhaps, shrinking, since recent EO statements seem to be designed to scare members and incite them to object to being signed-up members (which EO say in today's letter will "add weight to our case in court").

It looks like EO may actually intend to use different numbers for different purposes. The "Statement from EO Trustees" dated 6 February 2009, which was included with the letter to, it seems, all current and former signed-up members, concludes "It is important to restate that the correct answer to the question "How many Signed Up Members?" may still not give us an answer to the question of how many people have voting rights in EO."

And curiously, it looks like EO may be trying to disenfranchise all of its signed up members. The Statement from EO Trustees also says:

~If "the register" could be interpreted narrowly as "members who have signed the
~Signed Up Member forms", we needed to establish whether members' names had
~been legitimately entered on the register ie whether the Signed Up Member forms
~were legally adequate and binding in law.
~
~Hypothetically, if the forms have not complied with legal requirements in existence
~at the time of signing the form then a case could be made that the personal details
~were not on "the register" for legitimate reasons and could therefore be removed at
~a member's request. We cannot categorically advise members that this is the case
~until it has been determined by the lawyer.

I can't begin to make sense of why they say this, but it looks like EO are saying that they are trying to build a case that their own failure to keep a proper register of signed-up members means that none of the forms may be legally adequate or binding. This, then, would seem to mean that nobody is properly a signed up member. In that event, EO will demonstrate that they may be in violation of Sections 113 and 114 of the Companies Act (which require a company to keep and make available a register of members) making them subject to criminal penalty. It might also mean that none of the votes taken by signed-up members have been valid and therefore the board itself and all of EO's actions, at least in the past few years, are improper.

In the February newsletter, EO tried to solicit additional signed-up members. EO suggested to members that if they did not want to take the time to read up on the current issues, they should just send in a SUM form and a proxy form naming the chair of the meeting as their proxy, which the chair could vote as he pleases at the AGM.

Others have pointed out the flaws in EO's assertion in its Statement that "This is a situation inherited by current trustees." The core group of EO trustees have been in place for two years, during which they claim to have devoted extensive time and effort, with legal assistance, to reviewing the situation of signed-up members and proposing changes. Those changes (which were defeated at the January EGM) would have compounded the issues EO now claim are so vital, since they would have made all members effectively signed-up members and hence, it seems, all members' data would be subject to Section 116 requests.

All of this would indicate that EO is in such confusion about its own state of affairs, and uncertainty about how many signed-up members it has -- if any -- that it cannot properly hold an AGM on 21 February. How could EO hold a vote on trustees, when it does not know, at this late date, who its signed up members are, and has seriously compounded the confusion surrounding this with Monday's mailings?

Betsy