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TRECO, INC. v. LAND OF LINCOLN SAV. AND LOAN

September 21, 1983

TRECO, INC. AND WISCONSIN REAL ESTATE INVESTMENT TRUST, PLAINTIFFS,
v.
LAND OF LINCOLN SAVINGS AND LOAN, FRANK J. KINST, THOMAS A. KINST, RONALD R. DRAJKA, ROBERT J. HAJEK, PHILLIP R. KASIK, WILLIAM KINST, WARREN H. MUCHOW, JOHN A. STORCEL, AND JOHN J. LACHAJEWSKI, DEFENDANTS.



The opinion of the court was delivered by: Bua, District Judge.

MEMORANDUM ORDER

The above-captioned matter comes before the Court on plaintiffs' motion for preliminary injunction seeking an order requiring defendants to convene a special meeting of the shareholders of the Land of Lincoln Savings and Loan. Pursuant to notice, the matter was heard by the Court on September 19, 1983. The Court, having considered plaintiffs' motion, defendants' answer, memoranda, exhibits, and affidavits submitted in support of and in opposition to said motion, and having heard oral argument, does hereby enter the findings of fact and conclusions of law pursuant to Rule 52(a) of the Federal Rules of Civil Procedure.

Findings of Fact

1. Plaintiff Treco, Inc. ("Treco") is a Florida corporation with its principal executive office in Jacksonville, Florida.

2. Plaintiff Wisconsin Real Estate Investment Trust ("WREIT") is a common law business trust formed under the laws of the State of Wisconsin with its principal executive office in Chicago, Illinois.

3. WREIT is in "bad standing" with the Wisconsin Secretary of State due to its failure to file an annual report required under Wisconsin law.

4. WREIT is doing business in Illinois without a certificate of authority from the Illinois Secretary of State.

5. Defendant Land of Lincoln Savings and Loan ("Lincoln") is a savings and loan association chartered under the laws of Illinois. Deposits at Lincoln are insured by the Federal Savings and Loan Insurance Corporation. Lincoln is regulated by the Federal Home Loan Bank Board.

6. The nine individual defendants are all members of Lincoln's Board of Directors.

7. Lincoln has 2,470,855 shares of stock outstanding. Treco and WREIT each own 123,000 common shares of Lincoln. Together, Treco and WREIT own approximately 9.956 percent of the outstanding common shares of Lincoln.

8. Lincoln's directors are elected each year at the annual shareholders' meeting. Lincoln's next annual shareholders' meeting is currently scheduled for October 26, 1983.

9. Lincoln's existing bylaws contain no provision providing for cumulative voting. In order for the plaintiffs to obtain representation on Lincoln's Board of Directors based upon their stock ownership, plaintiffs must propose and have Lincoln's shareholders adopt an amendment to Lincoln's bylaws to require cumulative voting of shares at elections for members of the Board of Directors.

10. Under Lincoln's current bylaws, an amendment to the bylaws may be proposed by shareholders only at a special meeting of shareholders called expressly for that purpose. Under Article II, Section 3 of Lincoln's bylaws, the President of the Association is required to convene a special meeting of shareholders if he receives a written request for a special meeting from shareholders holding not less than 20 percent of all the outstanding common stock of Lincoln entitled to vote at the meeting. The written request must state the purpose of the meeting and must be delivered to the business office of Lincoln addressed to the Chairman of the Board the President, or the Secretary.

11. On September 15, 1983, plaintiffs, on behalf of shareholders holding in excess of 20 percent of Lincoln's common stock, delivered a written demand to defendant Thomas A. Kinst, President of Lincoln, requesting him to call a special meeting of Lincoln's shareholders for October 12, 1983, at 1400 Gannon Drive, Hoffman Estates, Illinois. The stated purpose for the special meeting was to consider and vote on a ...


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