Information Technology Reference
In-Depth Information
Clearly, Kutt did not expect the board to suddenly submit
to his demands and to reinstate a strong presidential office be-
cause of the threat of a shareholders' revolt against the guaran-
tors, at least not at this point. Indeed, a week later, during the
1 October board of directors' meeting, Robertson, as a counsel
to the company, advised against passing Kutt's amendment to
By-law No 1. In his view, such an amendment, if passed, would
amount to transferring the powers of the board of directors to
the president alone and “appeared to constitute an abdication of
their duty to manage the affairs of the Company.” He recom-
mended that the directors take a stalling approach to Kutt and
Pannell's request and consider the matter at the last possible day
on which it could meet, pursuant to the requisition under Sec-
tion 101(1) of the Business Corporation Act.
Robertson's delaying tactic prompted Kutt to go over the dir-
ectors' heads and approach the shareholders directly. He would
call a shareholders' meeting, use his controlling shares to pass
the amendment, and finally elect himself as president. To give
muscle to the shareholders' support for his plan, he mailed a
dramatic five-page long letter to the shareholders dated 18 Oc-
tober 1974.
Dear Shareholder:
You will find enclosed herewith a notice of a meeting of
the shareholders of Micro Computer Machines Inc. called
by me and to be held on October 29, 1974 …
The meeting has been called by me to pass the draft
By-law … to elect officers. If passed, the By-law would
have the following effects:
(1) All officers of the company would be elected by the
shareholders and would not be appointed by the
directors …
