While MLSNI and association executives run for cover in Chicagoland due to the findings of an audit of the MLS and its CEO that suggests that directors may have fallen down in their fiduciary duties to protect association members, the Chicago Association of Realtors and the Three Rivers Association of Realtors are taking lead roles in bringing closure to matters surrounding the CEO of MLSNI and what happened to two million dollars MLSNI invested in the CEO's wife's company REBIG by dumping their directors and helping to convene a special executive session of the board of directors of MLSNI.

In a document entitled "Unanimous written consent of the shareholders of Multiple Listing Service of Northern Illinois, Inc.," the Chicago Association of Realtors and the Three Rivers Association of Realtors announce their desire to replace the current directors of the Corporation that were originally appointed. They ask agreement from the other shareholders of MLSNI to remove two directors, Jim Kinney, MLSNI shareholder representative for CAR, and Mark Shell, shareholder representative for the Three Rivers Association of Realtors, without holding a special meeting to do so.

With the signatures of the other directors, the request is ratified, and the vacancies immediately filled.

According to the document, Kinney is being replaced by Sid Woods, and Shell is being replaced by Eleanor Nastepniak, effective October 1, 2004.

While these parliamentary actions may seem the normal course of events in the running of an MLS corporation, they are highly unusual. With some shareholder representatives stepping down only days away, including Kinney whose term was due to end October 22, 2004, the removal of the shareholder representatives early sends a strong message.

The replacement shareholders were supposed to be elected on October 7th, but it's clear that the organizations want different directors in place before the seventh.

Kinney, for example, was missing in action last week, say sources, when the board of directors meeting was canceled by the executive committee. The executive committee, it turns out, had no authority to cancel a board meeting, and about seven board members showed up to the meeting anyway, but did not have a quorum to conduct the business of the day - to discuss what to do about their CEO, Jay Huffman. Sources say Kinney is being removed because his refusal to attend constituted a choice of protecting Huffman by insuring there wasn't a quorum, over his fiduciary responsibility to CAR and its members. He also refused to communicate, say the sources.

According to Kinney, he has not been "removed," but that his term is up when the new shareholder representative is installed along with the new broker representatives on October 22, 2004.

"I'm perplexed by all this crap," said Kinney to Realty Times. "My term ends this month, I'm the banquet chair, and the new directors will be installed October 22."

As to the directors' meeting where he was allegedly MIA, Kinney says, "The meeting had been canceled, and a dissident group showed up anyway. You've got your facts wrong. I don't feel it's responsible to report innuendo and half-truths. What's being said is slimey. I was not removed. My term is over. I swore in the new people! There was no board meeting and there was not a quorum, and for a meeting to take place it needs 72 hours notice, and there was no 72 hour notice, and there is no reason I would be dismissed."

Those "dissidents" were seven other MLSNI board members which constitutes a majority of the MLSNI shareholders, but not a quorum, and Realty Times has copies of the "consent" requesting Kinney's removal.

The timing is interesting because as of October 22, 2004, the special elections for new broker representatives will be complete. To give small brokers and big brokers a fair shot at being on the MLSNI board, there are four classifications of brokers, and the first three classifications have already voted for their broker directors.

Meanwhile, the board of directors has been notified of an Executive Session, which will be held on October 7, 2004. The agenda, according to a copy obtained by Realty Times, will include a discussion of MLSNI CEO Jay Huffman's employment agreement, among other items.

Editor's note: Concerned that this story makes it appear that CAR has "dumped" its director Jim Kinney, shareholder representative John Vranas says, "We didn't remove him, his term ended on September 30, but because of the ambiguity of MLSNI documents, we gave notice to the other shareholders that we have a new director as of Oct. 1, and we had to get consent from the other shareholders. The new director will be voting at the upcoming Oct.7th meeting.

Published: October 4, 2004

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