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CLOAK$DAGGER

2/24/23, 5:31 PM

CLOAK$DAGGER

Fiduciary Duties

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Crooked River Ranch hired gun/attorney, Kevin Harker has written articles in the past directly related to directors fiduciary duties and loyalties. “Board members must act in the best interests of the ENTIRE membership. This also implies that directors must put their own interests below the interests of the community, even if those interests conflict.”

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Directors have a responsibility to act “PRUDENTLY” and act with care and seek advice, as well as seek INFORMATION “when necessary in order to make informed decisions.”

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Oregon Revised Statute (ORS) 65.357(3) notes a director may not be acting in good faith, when ignoring information indicative of failure to comply with Oregon law.

Failure of a director(s) to act in good faith can be GROUNDS FOR A DIRECTOR’S PERSONAL LIABILITY.

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The Oregon Attorney General’s 2022 Guide to Oregon Nonprofit Board Service in Oregon covers directors responsibilities and duties.

“In carrying out board responsibilities, the law generally imposes three duties of trust. They are regularly described as the duties of due care, loyalty to the corporation and obedience to the law.”

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Directors hold a duty to investigate. The Attorney General’s Guide states a Director’s “Duty of Due Care” includes active participation and reasonable inquiry:

“Directors should request and receive sufficient information so that they may carry out their responsibilities as directors.

When a problem exists or a report on its face does not make sense, a director has a duty to inquire into the surrounding facts and circumstances.

The director also has a duty to investigate warnings or reports of officers or employee theft or mismanagement.”

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“Duty of loyalty: Decisions regarding the organization’s funds and activities must promote the organization’s public purpose rather than private interest.

Any potential conflict transactions should be scrutinized closely by the board with the realization that the public will predictably be skeptical of such arrangements.”

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SCRUTINIZED CLOSELY?

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As previously reported, a questionable AFE for $21,723.12 was unanimously approved, after the fact, at last Monday’s Board meeting.

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As stated above, directors have a duty to investigate surrounding facts and circumstances. They must, according to Harker, act in the best interests of the entire membership.

Transactions need to be closely scrutinized by the directors to alleviate suspicion.

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“Duty of obedience: Directors have a duty to follow the organization’s governing documents (Articles of Incorporation and Bylaws), to carry out the organization’s mission and to ensure that funds are used for lawful purposes.

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Also, directors must comply with other state and federal laws that relate to the organization and the way in which it conducts its business.”

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Typically board members wear the CLOAK of immunity and they use it as a DAGGER against targeted Association members.

However, directors can be subjected to litigation “alleging that a loss was due to their gross negligence, willful or fraudulent acts.”

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Ranch officials have used attorney Harker’s services as their private hired gun to go after certain Association members deemed the enemy.

The Board has imposed three specious/punitive/retaliatory resolutions as a means to silence, control and intimidate members.

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Financial FINES are imposed without the benefit of presenting a statutorily required defense, further denying members due process.

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Directors offer neither real explanations or informed documentation for questionable actions or inactions leaving the membership many times holding the bag-paying the freight.

CLOAK$DAGGER

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Ranch Matters Staff

John Stevens & Dave Stangland

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