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19
20
minutes and certificates of incumbency, created throughout this period,
acknowledge and confirm Reuther as CEO. JES acknowledged that Reuther had
business cards and stationary with the designation of CEO of the Hospitality
Companies. JES also admitted that Reuther was roundly heralded by both
employees within the organizations, as well as the public, as CEO of the
Hospitality Companies. In a Gaming Control Board Application filed by NOP,
Reuther is listed as CEO. Even JES' law firm addresses him in correspondence
as CEO and corporate contracts were edited by counsel specifically for the
purpose of correcting his title as such. Finally, it goes without saying that
Reuther had a substantial financial interest in the Hospitality Companies. This
WLR Exh. 6.13, 6.14, 6.15.
WLR Exh. 8.18.
The Bylaws specifically provide that the board may, at its discretion, appoint such
other officers as it shall deem necessary. Once elected, the officer serves at the
boards' pleasure until removed by an affirmative vote of a majority of the board.
as a “specialist” in corporate law, would certainly have taken action to prevent
those dealing with the Hospitality Companies from being misled. At a minimum,
by allowing one cloaked with only apparent authority to hold himself out as CEO
to the public, JES was in effect ratifying his actions as such.
Tr.T. at 117.
JES as President
While Reuther is the CEO of the Hospitality Companies, JES is clearly its
president. Elected in January of 1999, JES has consistently been referred to in
minutes of shareholder and director meetings, corporate records, and other
documents as the president. Although Reuther argues that JES' term was to be
However, for the reasons stated, it is without effect.
WLR Exh. 3.12
The Relative Powers and Duties of the CEO, President, Board of Directors and
Executive Committee
Having determined who sits on debtor's board and holds its managerial offices,
approvals to submit a plan for consideration. If it can not, the appointment of a
trustee would be in order.
The activities and powers of the board, and a corporation's officers, may be
gleaned by custom and history. The duties of board and officers are broadly
defined under Louisiana law. The board is the primary agent for the
.
The office of president, itself, confers no power to bind the corporation or control
its property in and of itself.
.
But who controls the right to formulate and present a plan of reorganization?
the corporation. The president shall see that all orders and resolutions of the
board are carried into effect. The president *690 shall have the duties of
supervision and management, including the sole authority to hire and fire
employees, and generally all matters having to do with the normal day to day
operations of the business.
sometimes the shareholders, reserved for themselves, the authority to
22
specifically authorize actions, on a case by case basis, outside the ordinary
course of business.
for the long term vision of the company is closer to the authority to formulate a
plan of reorganization, without a specific resolution to reorganize debt, incur new
borrowings, or sell substantial assets, this Court can not find that a general grant
to direct the company's progress includes the right to present a plan of
reorganization.
Debtor cites the Court to as authority for the principle that the president is
authorized to present this debtor's plan. The applicability of turns on the power
of NOP's executive committee to authorize the president to so act.
Powers of the Executive Committee
JES argues that under the Bylaws, the executive committee, composed of the
Under Louisiana law, a board may form committees, composed of directors, for
the purpose of conducting board business. As an initial matter, the Court notes
that the executive committee is not composed of directors, but officers of the
corporation. Given that the Bylaws define the duties of officers as clearly
managerial in nature, and there are no requirements in the Bylaws that officers
meetings. Since the Bylaws contemplate that these meetings will be held
monthly, the board could not have envisioned that much in the way of
significant action would be necessary. WLR Exh 2, Art. I, sect. 1, 4
*691 Second, while Louisiana law does not limit the scope of authority that a
board may delegate to agents, noted commentators have observed that to
abdicate total control of this corporation to its officers for an indeterminate
amount of time. To come to such a conclusion would require this Court to import
a level of deference to the officer class by the boards of the Hospitality
Companies that simply does not exist.
.
until the recent past, met frequently, even monthly, and historically exercised
significant supervision over the officers of the Hospitality Companies. Nothing in
the record of the case, or the conduct of the Hospitality Companies, indicates
that these boards did not take their role in corporate governance seriously.
Nothing substantiates the view that they would so completely abdicate their
bankruptcy proceeding. Absent a specific grant of authority, the board of
directors remains the authority to propose a plan of reorganization to creditors
and court alike for approval.
.
; (corporate president generally cannot bind the corporation in a
incompetence, or gross mismanagement of the affairs of the debtor by current
management either before or after the commencement of the case....” and (2)
under , “if such appointment is in the interests of creditors, any equity security
holders, and other interests of the estate.”
The appointment of a trustee is an extraordinary remedy as there is a
25
the creditors at heart. Allegations of hidden assets, claims against insiders for
For these reasons, the Court will appoint a trustee.
20
minutes and certificates of incumbency, created throughout this period,
acknowledge and confirm Reuther as CEO. JES acknowledged that Reuther had
business cards and stationary with the designation of CEO of the Hospitality
Companies. JES also admitted that Reuther was roundly heralded by both
employees within the organizations, as well as the public, as CEO of the
Hospitality Companies. In a Gaming Control Board Application filed by NOP,
Reuther is listed as CEO. Even JES' law firm addresses him in correspondence
as CEO and corporate contracts were edited by counsel specifically for the
purpose of correcting his title as such. Finally, it goes without saying that
Reuther had a substantial financial interest in the Hospitality Companies. This
WLR Exh. 6.13, 6.14, 6.15.
WLR Exh. 8.18.
The Bylaws specifically provide that the board may, at its discretion, appoint such
other officers as it shall deem necessary. Once elected, the officer serves at the
boards' pleasure until removed by an affirmative vote of a majority of the board.
as a “specialist” in corporate law, would certainly have taken action to prevent
those dealing with the Hospitality Companies from being misled. At a minimum,
by allowing one cloaked with only apparent authority to hold himself out as CEO
to the public, JES was in effect ratifying his actions as such.
Tr.T. at 117.
JES as President
While Reuther is the CEO of the Hospitality Companies, JES is clearly its
president. Elected in January of 1999, JES has consistently been referred to in
minutes of shareholder and director meetings, corporate records, and other
documents as the president. Although Reuther argues that JES' term was to be
However, for the reasons stated, it is without effect.
WLR Exh. 3.12
The Relative Powers and Duties of the CEO, President, Board of Directors and
Executive Committee
Having determined who sits on debtor's board and holds its managerial offices,
approvals to submit a plan for consideration. If it can not, the appointment of a
trustee would be in order.
The activities and powers of the board, and a corporation's officers, may be
gleaned by custom and history. The duties of board and officers are broadly
defined under Louisiana law. The board is the primary agent for the
.
The office of president, itself, confers no power to bind the corporation or control
its property in and of itself.
.
But who controls the right to formulate and present a plan of reorganization?
the corporation. The president shall see that all orders and resolutions of the
board are carried into effect. The president *690 shall have the duties of
supervision and management, including the sole authority to hire and fire
employees, and generally all matters having to do with the normal day to day
operations of the business.
sometimes the shareholders, reserved for themselves, the authority to
22
specifically authorize actions, on a case by case basis, outside the ordinary
course of business.
for the long term vision of the company is closer to the authority to formulate a
plan of reorganization, without a specific resolution to reorganize debt, incur new
borrowings, or sell substantial assets, this Court can not find that a general grant
to direct the company's progress includes the right to present a plan of
reorganization.
Debtor cites the Court to as authority for the principle that the president is
authorized to present this debtor's plan. The applicability of turns on the power
of NOP's executive committee to authorize the president to so act.
Powers of the Executive Committee
JES argues that under the Bylaws, the executive committee, composed of the
Under Louisiana law, a board may form committees, composed of directors, for
the purpose of conducting board business. As an initial matter, the Court notes
that the executive committee is not composed of directors, but officers of the
corporation. Given that the Bylaws define the duties of officers as clearly
managerial in nature, and there are no requirements in the Bylaws that officers
meetings. Since the Bylaws contemplate that these meetings will be held
monthly, the board could not have envisioned that much in the way of
significant action would be necessary. WLR Exh 2, Art. I, sect. 1, 4
*691 Second, while Louisiana law does not limit the scope of authority that a
board may delegate to agents, noted commentators have observed that to
abdicate total control of this corporation to its officers for an indeterminate
amount of time. To come to such a conclusion would require this Court to import
a level of deference to the officer class by the boards of the Hospitality
Companies that simply does not exist.
.
until the recent past, met frequently, even monthly, and historically exercised
significant supervision over the officers of the Hospitality Companies. Nothing in
the record of the case, or the conduct of the Hospitality Companies, indicates
that these boards did not take their role in corporate governance seriously.
Nothing substantiates the view that they would so completely abdicate their
bankruptcy proceeding. Absent a specific grant of authority, the board of
directors remains the authority to propose a plan of reorganization to creditors
and court alike for approval.
.
; (corporate president generally cannot bind the corporation in a
incompetence, or gross mismanagement of the affairs of the debtor by current
management either before or after the commencement of the case....” and (2)
under , “if such appointment is in the interests of creditors, any equity security
holders, and other interests of the estate.”
The appointment of a trustee is an extraordinary remedy as there is a
25
the creditors at heart. Allegations of hidden assets, claims against insiders for
For these reasons, the Court will appoint a trustee.
