Conference 7.286::dcu

        According to the bylaws, if we (DCU and/or its members or anyone
        else) sue the BoD for any actions they have taken on behalf of the
        DCU, then the DCU picks up their legal tab, even if they are found
        guilty of mismanagement or fraud.  This would seem to cover even
        the defense that Mr Mangone will obviously require for his aledged
        actions. See article XIX, section 8(a)-(c) of the bylaws.
        
        I seem to remember reading somewhere in here that the BoD was
        bonded for $3M.

Copied from Note 304.24

Re; .22

**"At this point, its' their lawyer versus us non-layers."**

Now, here is an interesting point.  Is DCU BOD paying for "their" lawyer
with DCU's and, therefore, its' membership's money?  Is "their" lawyer
advising BOD how to negate or "work around" DCU members special petition?
I had understood DCU BOD's lawyer was hired to litigate with Magone's siutaion.

    
    	Re: .0
    
    	When I was serving on a condo association's board, that same
    question of "what are our liabilities?" came up.  The answer from the
    condo's attorney was that as long as the board members were acting
    with prudent business judgement based on acceptable levels of information
    they could not personally be held liable for anything that went wrong.
    (This isn't to say noone could have sued the condo's board -- its just
    that the board would probably win.)
    
    	The "acceptable levels of information" part says that the board had
    to take reasonable care to insure that they had all the information
    customarilly needed to make that particular decision.  It doesn't say that
    the board has to research everything to the last degree, however, only
    obtain enough information that a reasonable person would reasonably
    need to make the decision.
    
    	The "prudent business judgement" part says that the board would
    have to consider the information at their disposal, and make reasonable
    judgements that a reasonable person would be expected to make.  (ie.
    don't ignore pieces of information, don't make a decision that is
    contrary to what the information suggests, don't make a decision that
    knowingly would harm the business, etc., etc.)
    
    	These two parts together make up what is known as a "fiduciary
    responsibility" for something.  If someone were to step outside the
    bounds of the fiduciary responsibility, _then_ they could be personally
    held liable for their actions.  As can be infered from my wording thus
    far, it all boils down to doing what is considered "reasonable".
    
    	In other than blatant cases, violating a fiduciary responsibility
    can be a very hard thing to prove.  The "reasonable information" part,
    for example, can't be proven by looking back on a situation with
    new-found knowledge and say "but you should have done XYZ..." based on
    that new-found knowledge.  What you have to prove is that the board
    had enough information / evidence / reasonable doubts / etc., _at that
    time_ to cause a "reasonable board" to seek other information before
    making a decision.  The same with the "prudent business judgement"
    part.  Just because something went wrong doesn't mean that prudence
    wasn't used in making the decisions -- what has to be proven is that
    the board made a decision contrary to what a "reasonable board" would
    have made at the same time and with the same information.
    
    	Anyways, that's how our condo's attorney explained it to us.  Apply
    at will to the DCU situation...
    
    							-craig
                                                            

    
      re -.1
    
      Kinda like the "Due diligence"  stuff I pontificated about a 
    	while ago.  (But I just play one on TV...  :^)
    
      There is, however one other instance where a director can be 
    sued.  If a director knows (or should have known)  of, and condones 
    criminal actions of the organization,  the directors can be held 
    individually liable for the criminal activities of the entity. 
    
    
    						-al
    

    
    RE: bonding
    
    I requested copies of the bonding policies on the BoD before they
    stepped in to protect us.  They denied copies but did tell me that the 
    BoD was bonded for a total of $3 million.
    
    RE: lawyers
    
    Yes people, may queries concerning DCU's lawyers have told me that DCU
    has hired the biggest and best legal counsel in Boston.  I have been
    told they are very expereienced in handling matters involving
    management and shareholders.  We ARE paying for our BoD's lawyers. 
    Welcome to the cold, cruel facts of life, chapter 1.  The people in
    power have all the advantages of that power.  What WE have is
    determination to do the right thing, no matter how long it takes.  No
    legal counsel can prevent our open and trusted BoD from coming up for 
    election over the next few years.  Trust me BoD, we'll still be here, 
    waiting patiently for you.  My pen eagerly awaiting...

    We should run another petition drive!  Lets set up a petition to see
    how many folks would be willing to start a new credit union, and
    dispense with the current BOD altogether... ;-)