Court reviews Huna Totem election

Arguments begin in appeal of decision on Native corporation's '99 election

Posted: Wednesday, March 10, 2004

The Huna Totem Corporation's dominant directors effectively "placed their hands over the ballot box" to keep from being recalled in 1999, an attorney for dissident shareholders told the Alaska Supreme Court in Juneau Tuesday.

Superior Court Judge Patricia Collins ruled against plaintiffs Gregory O. Brown and Karl H. Greenewald Jr. in their lawsuit in January 2003, but in answer to a question from one of the justices, attorney Fred Triem said her findings were wrong.

Barbara Nault, representing six directors and the corporation's chief operating officer, argued for the justices to uphold Collins' decision.

"They believed they were in compliance," she said. "There is certainly no evidence that any defendant directed these proxy forms be sent out with errors."

The lawsuit was filed in 1999, seeking compensatory and punitive damages.

The dispute goes back to a disagreement over a land deal the directors voted on in March 1997. Greenewald, who is no longer a director, was on the board at the time. The issue led to a controversy that culminated in an effort to recall directors through proxy vote at the 1999 annual meeting.

The proxy forms did not provide a box where shareholders could vote in favor of the recall, Triem argued.

There weren't any final answers Tuesday. Justices took the matter under advisement after listening to oral arguments.

Much of the time justices allotted for oral arguments Tuesday concerned their questions about whether problems with the election were "inadvertent."

Justice Walter L. Carpeneti said the Alaska Division of Banking, Securities and Corporations found the omissions "inadvertent."

"Quite the contrary," Triem said. "They found them deliberate."

Justice Dana Fabe said she found the BSC using the term "inadvertent."

Triem argued that the omissions were found deliberate at the outset, but that the term "inadvertent" was in a consent order, which he compared to a plea agreement. "It is a settlement, but it does not vacate the process that went before it."

Nault also characterized the errors as "inadvertent" and "technical."

"In what sense are they technical errors?" Carpeneti asked, noting the absence of a box to vote for the recall.

Nault noted that many people did vote to recall directors.

She also said the plaintiffs did not show that they were damaged.

Chief Justice Alexander O. Bryner said that finding someone's voting rights had been violated would automatically lead to a finding that they were harmed.

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