Last week, in a hastily called meeting of the shareholder board of directors of Chicagoland's MLSNI, the board voted by a narrow seven to six margin to implement a new all-or-none rule that requires multiple-office brokerages to include all their offices in order to qualify for access to services.

But irregularities with the way the vote was taken has the shareholder board and some of its member boards scurrying into tense meetings as charges of improprieties and possible lawsuits are hurled by influential broker members, say sources.

Leading the charge are Chris Eigel, president of Koenig & Strey GMAC, Doug Ayers, president of Coldwell Banker Residential Brokerage, and Steve Baird, CEO of Baird and Warner, who collectively speak for 18 percent of the membership of MLSNI. All three have been vocal in the press about their objections to the way the shareholder boards and the CEO of MLSNI have concentrated efforts on selling broker data and have pulled many of their offices out of MLSNI in favor of rival MLS, MAP, in protest.

Monday, a new MLSNI shareholder meeting decided to set aside its previous vote and set a new date to vote. Realty Times could not confirm the date of the new vote as conflicting sources said June 21st and June 23rd were both the correct dates.

"It appears as though the MLSNI shareholder vote was taken without proper formalities," says a source, "which means that the June 15th date set last week can no longer be enforced."

MLSNI CEO Jay Huffman is in the fight of his life to retain control of the nation's largest MLS, and its subsidiaries and the offshoots it wholly owns or largely influences. For example, MLSNI is a major shareholder of REBIG, a company that Huffman's wife started with a large investment authorized by Huffman and the MLSNI shareholder boards. Mrs. Huffman refuses to comment, but her salary is about $350,000 annually, according to sources.

It is this arguably close involvement in REBIG and other matters by Huffman that allegedly precipitated the big broker walk-out and dissension that MLSNI is experiencing today. Many brokers, such as Eigel and Baird, do not want the associations to be in the for-profit MLS business, because of what they perceive as conflicts of interests. They, along with a few other brokers including Ayers, have opted out of sharing their listings with REBIG, the Huffmans' brainchild, and have actively moved several offices to a competing MLS, MAP.

MAP says that over 60 offices have joined MAP since April.

Huffman says it is about control. MAP is broker-owned. MLSNI is association-owned. But he points out that MAP is also looking at data-mining, in the same way that REBIG datamines MLSNI listings. He says that he can't let 18 percent of members dictate what the other 82 percent want to do, and that many MLSs across the country are looking at data-mining, as well as brokers who want to cash in.

Adding pressure to the situation is a forensic audit of Huffman and his activities, MLSNI and its affiliates, and, it should be no surprise if the audit extends to some shareholders whose individual representatives may or may not have committed irregularities. Some may be proven to have compromised or been confused in their fiduciary responsibilities to their own memberships. At the least, members are asking - who allowed this to happen?

For example, the MLSNI motion to evoke the rule was made by a representative who, some say, didn’t have authority to make the motion, after CAR executives had assured the "big brokers" that it wouldn't push to have an all-in, all-out rule.

Baird says he wonders if the shareholder boards had even been notified that what they were contemplating might have anti-trust implications, and if they had known, would the vote ever have taken place?

"You can't say because you are in this, you have to be in that," says Baird. "That is a clear violation, which they should know that because Coldwell Banker had notified the executive committee of that back in April but that information apparently didn't get passed along to the directors."

In an attempt to do damage control, a meeting was held yesterday by the Chicago Association of Realtors board that included an invitation to the "big brokers" to tell their side of things. Eigel and Ayers spoke to the board, but Baird was unable to attend.

Witnesses said the board listened intently while Eigel and Ayers told them that they wanted the association to stop licensing data, stop investing in non-MLS entities and functions, stop being a profit-driven organization, have the shareholders become more involved in the governance of MLSNI, and "start listening to your customers."

Published: June 9, 2004

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