MLS Merger Voided
Illinois Circuit Court, 2007 Aurora Tri-County Assoc. of REALTORS® v. MLS of N. Illinois
September 1, 2007
An Illinois court has determined that a vote to merge two MLSs was invalid because a quorum was not present for the vote at one of the MLSs, as required in the group’s bylaws. In the case, the board of the Multiple Listing Service of Northern Illinois provided notice to shareholders in its private corporation that a vote on a proposed merger with another MLS would be held during the annual meeting.
The MLS’s bylaws specified that a quorum (more than 50 percent of shareholders) must be present for all votes, and then the decision could be made by a majority vote.
Only five of the 10 REALTOR® associations that held equal shares in the MLS attended the meeting. However, an attorney hired by merger proponents opined that the shareholders present held the majority of votes based on an earlier agreement and therefore constituted a quorum. Those present proceeded to approve the merger.
The five shareholders that had boycotted the meeting sought an injunction. The Illinois Circuit Court ruled the merger invalid because a quorum was not present.
The voting agreement, which allocated votes based on the number of members in each association, did not affect the quorum requirements for shareholder votes, said the court. The court also ordered that all shareholders must attend a meeting within 30 days to vote on the merger.
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