Horses - COURT FINDS FOR AHSA: USET ACTIONS "NULL AND VOID" - August 2001 - Equiworld

COURT FINDS FOR AHSA: USET ACTIONS "NULL AND VOID"

In a dramatic court ruling, the United States Equestrian Team's corporate actions this year have been declared "null and void," and its corporate books and records have been opened to unlimited inspection by its trustees.

The ruling was issued by mail on Thursday, August 16, 2001. The Superior Court of New Jersey found for the AHSA (now USA Equestrian) and its president, Alan F. Balch, in the case Balch vs. United States Equestrian Team, Inc. The decision followed oral argument held on Friday, August 3, at Somerset County Courthouse, Somerville, NJ.

Balch filed the lawsuit in April upon authorization by the AHSA Executive Committee, following the USET's commencement of its litigation against AHSA in late February, seeking to replace it as National Governing Body for equestrian sport. Balch had made numerous formal requests for financial and other information beginning in December and January, and placed formal objections to USET's refusal to respond, as well as other corporate conduct, on the record at its meetings.

Presiding Judge Helen E. Hoens wrote, "As abhorrent as Mr. Balch's effort to secure documents from USET may be to that organization and in spite of the fact that his true motivation may be the advancement of interests of AHSA of which he is the president, New Jersey law is crystal clear respecting his absolute and unfettered right to have copies of the documents he has requested provided to him without any limitations imposed upon him as to their use." She ordered that Balch be permitted to inspect and copy "all corporate books and records [he] may request to review."

Next, the Court found that Balch had "quite properly demanded the relief that his position as a trustee requires that he demand" in objecting to the USET's engaging in ultra vires actions (actions beyond its authority). The USET's violations of statute and of the governing Certificate and by-laws of the organization "cannot be overlooked," and she found these violations "so fundamental that they render legally null and void all decisions made and actions taken as a result of votes" by improperly seated boards of the USET dating back to at least January 2001. The Court specifically declared "null and void" all USET's actions taken at its 2001 Annual Meetings and meetings of its Board of Trustees on April 2, April 25, April 30, and May 23, to which Balch had objected.

In addition the Court declared null and void "the USET's purported adoption" of its most recent bylaws, finding them "inconsistent with its certificate of incorporation."

Commenting on the outcome of the litigation, Balch said, "Naturally, I'm gratified that the court agreed with our strongly held position and made its reasoning so clear and so emphatic. On the other hand, these matters are so straightforward that no trustee should have to engage in litigation to enforce what are fundamental rights. I'm hopeful the USET's current leadership will now see the advantages of managing its affairs in a cooperative and open way, and turn away from its destructive and defiant strategy to divide the sport. Certainly the consequences of their actions up to now have been a sad commentary on the management of an organization that seeks to replace a fair and open governing body for this entire sport. We hope this decision can finally move us in a direction toward ending the hostile atmosphere in the sport the USET has fostered."

The New Jersey litigation was handled on behalf of Balch and USA Equestrian, formerly AHSA, by the firm of Collier Jacob and Mills.

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 77,000 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.