Porsche 356 Registry Litigation: Update?

[bbspdstr]

Hi there,

There's just too much "information" about all this; can someone please summarize for me what this lawsuit (and counter suit) is all about? No judgements on who's right or wrong, just: "What are they arguing over?"

Thanks much,
RT

RT, I, for one, have read as much as I can find. As for 'right or wrong,' the WHAT will expose the WHO when the dust settles.

Some, like you, maybe have an interest or curiosity but maybe don't care as deeply as others and merely want a summary of the goings-on.

That's very understandable and admirable. Many of the few of us would appreciate that involvement from many more 356ers.

I will say that this site contains or refers to more actual public legal information than the Registry site, although anyone would be wise to read both 'versions.' Learn as much as you can, then make your own personal summary. That is what I would advise anyone to do to learn of the agendas, the suits, the players involved.

Mic's gotten it summarized well and as I see it, the dispute is over details of how the club is run and how it is protected (especially financially and legally) and the transparency needed to let any interested member know for themselves what's going on behind the scenes. The best few words I can think of are "Insistence against resistance."

While no one has been 'accused' or 'attacked' for anything other than secrecy and no malfeasance has been mentioned, the frustration of some asking questions that get no answers is the primary basis for the 'arguing.'

My own Best Guess is that about 75% of the club is just fine as is, but the 25% that some say needs tweaking is what's causing the concern among a few of us for more years than should need counting.

It's a mix of personal decisions made by leaders not sitting well with some members and with the advent of the Heinrichs suit, lawyers trying laws and regulations that apply to the non-profit corporate entity that the Registry is and the demand after a request for access to certain aspects of the Business End of the club.

Steve Heirichs' suit has opened things up, if nothing else. Personally, some feel the boat needed rocking and support Steve for 'putting his money where his mouth is,' many others are annoyed that someone actually rocked it. They enjoy Still waters.

Not much would have altered the status quo otherwise. An unfortunate way to overcome the biggest challenge in the mix, a epidemic sized case of member apathy.

It's a saga of a few against one. Think of Steve Heinrichs as David and the trustees and officers of the club as Goliath.

Both 'sides' are made up of a tiny minority of members but if more of the silent (and sleeping or reading their magazine) majority of members would have taken what we'll now call a 'side,' either 'side,' I believe none of this would have been more than an educated discussion and conclusion among members for what is 'right or wrong.'

I hope this helps.
-Bruce Baker, 38 year Registry member.

[Trevor]

Yesterday I received an email from the 356 Registry on latest events, happenings with the club, etc. There was no mention of the current status of the legal entanglements, however this was mentioned.

*Registry Audit Committee is formed*
Responding to suggestions from members, the trustees recently put out a call for qualified individuals to serve on an internal audit committee. The two members who will initially serve, Mark Roth and Eric Cherneff, are seasoned accounting professionals and long-time club members. They are authorized by the board to review any and all contracts, transactions and accounting records. Their duties will be to advise the board regarding accounting procedures, expense processes, contracts and other financial matters. A complete overview is in the members-only section at our website.

First off, a round of applause goes to Eric and Mark to dedicating their time for the betterment of the club. I've traded a few emails with Eric and found him to be a true Porsche nut like myself and Mark was my running partner when the Group of Four ran as a slate to try and implement swift changes, many of such changes we are seeing now.

Now for my question. Please, honestly tell me, what the heck am I missing here. Isn't the foundation of the lawsuit about access to information or the lack thereof? Every member meeting that I've attended (all but one - 2013 WCH) the Trustees say that they've offered everything to Steve. Now I read that Eric and Mark are going to have unrestricted access and make a report to the Trustees; which I think we can have a reasonable expectation that the report will be distributed to the members. Eventually...

Steve, this question is addressed specifically to you if you choose to respond. Have they provided you the financials and contracts that you've asked for?

[Steve Heinrichs]

Trevor,

You ask a seemingly straight forward question and I will attempt to answer being mindful of the continuing litigation.

If you go back to the original litigation filing you will see that I asked for (my layman's words) to be in compliance with Ohio law as to "1702" among other things. I did not accuse anyone of malfeasance.

The point is/was that each member should be entitled to examine the "books & records" pursuant to the law.

Now, as a part of the litigation,including the Regitry's counterclaims, the process of "Discovery" has place and this resulted in the Registry making motions all the way to the Ohio Supreme Court in which they resisted much of the discovery requests. The courts ruled in my favor and, quite recently, material has been provided. This matter of discovery is not settled.

I am not at liberty to tell you what I have.

Suffice to say that I continue to fight for the rights of each member to examine material pursuant to the law and the now new Registry idea of allowing an new committee to look at things and advise is odd in that it does not address a regular member's rights and, moreover, the notion that the committee can only report information directly to the Trustees is inconsistent with normal corporate practice of such a committee having responsibilities to shareholders as well.

I hope this helps.

Steve Heinrichs

[Trevor]

OK, thank you for responding Steve.

[356JAGER]

So in simple terms for those wanting the facts without frills:

The guys who are refusing to give members of the club the records they are entitled to, are now appointing two club members with accounting experience, to 'audit' the records and then report the results to (drum roll, cymbal crash) the guys that won't show the records to anyone else. Mike, are you out there, I'm not only tired, but my credulity is way past the point of WTF ? A real Jedi Mind
Trick, played on the originator, but not on anyone with even one bottle in the six pack.

[Craig Richter]

Steve,
Apologies if this question is legally naive, but why are you not at liberty to share with us what the Registry has given you? Can a judge put limitations on discovery he has ordered?

[Steve Heinrichs]

Craig/All,

Let me try to give a non-lawyer answer since I am not one nor have I ever played one on TV.

I actually do not know whether "sharing" such information is illegal, immoral or fattening---but I am not going to do it even if it is legal.

First, it really serves no purpose. That is, this is discovery, not the case. The information was supplied to my lawyer as we supply discovery that was "on me" to the other side. It is not public as a part of the case. Neither were the discovery requests made public although since there were motions filed to stop some discovery, one can go read those public documents and make some assumptions. Discovery information is later used by both sides in depositions and in the trial.

The issue (well, the main one)is what is a member entitled to under Ohio law. That will be decided by the trial or earlier if a settlement is reached. And, that determination,in my view, needs to then apply to all members, not just me. No one should feel complelled to litigate this again and the Registry should not have to defend this litigation again.

So, in fairness to the process, I am not (even if I legally can) get into what material was provided or what I think about it or what it may mean.

I am going to hit send shortly on this note but I will follow up to describe which kinds of questions I have answered over the last nearly 1.5 years and which ones I will continue to answer.

I hope you understand and maybe the next note will further clarify.

Steve Heinrichs

PS---I will say one further thing: there is some material that, before it was provided, I asked my lawyer to not provide on to me at this time.

[Steve Heinrichs]

Continuing---

I think a fair reading of my posts here and at Samba and, as well, on the Registry Forum (where I have not been able to post since around July, 2012) would suggest that I have tried to explain what was going on, what I asked for, and, as well, todefend against seriously vile attacks.

In any event, the responses from the Registry and its Trustees and ( largely unmoderated on the Forum) followers, have taken two forms---First, the set-up of a strawman and then an attempt to take an action to knock down that strawman. Second, to avoid the actual issues and set-up 'motivations' for my actions.

Let me explain as briefly as I can:

So, I asked for the material required by law. The response is basically that I have accused some of wrongdoing and they are outraged (this is the strawman). Then, a cash basis "audit" is performed which purports to exonerate someone from something they were never accused of in the first place. Setting aside the fact that it does no such thing (exoneration), it is costly and the cost is blamed on me. The recent internal audit committee arrangement is similar. The implication is that this will ensure that nothing untoward will go unnoticed. Again, no one suggested such a need and, assuming the law of Ohio was sorted out in court, why the need for such a committee? Moreover, the committee seems not allowed to report to the membership.

As to motives---this distraction from the serious questions of the cases--was and continues as personal defamation and destruction of me. Think about it seriously. To sell books? To get a member's address to steal a car? Because I have some serious health change? Believe me, I do not want Lady Gaga's address to sell her a book or steal her 356 from her garage.

But---the truth is that these are the tactics that have been deployed all the while the little changes have happened to beat down that strawman that never existed. The little changes do zero to get to the fundamental issues of the litigation.

The court system in the U.S. is lengthy, very costly and has many flaws. Nonetheless, I trust it and it is the best in the world. The Registry will be a better place when this is all settled.

Steve Heinrichs

[Bill Sampson]

Trevor:

First and most important - if interested, drop by Doheny tomorrow for Doheny Wood and say hello to Rosemary and me.

Second: Kudos to Eric Cherneff and Mark Roth for agreeing to volunteer on the internal audit committee (if I've given it the correct name). Their assignment, unfortunately, is antithetical to the members' best interests since the trustees forbid them to share what they learn with the members. Isn't that the problem - the trustees seeking cover instead of transparency?

[356JAGER]

I guess I'm not paying attention, but could somebody answer this riddle for me:
If the trustees just paid beaucoup bucks for an 'official audit',
(the amount spent still not revealed, at least to anyone I know)
by a Super Independent Excellent Auditing firm whose offices are
within a couple of blocks of the Registry's 'place of business', i.e.
Mr. Maltby's publishing business, WHY do they need to coax two club
members with bookkeeping experience, to repeat the process ? Incredulous minds want to know....

[MMW]

My take is they are setting up a committee so they have checks & balances without having to go to an outside, pay as you go accounting firm in the future. The reason for reporting back to them, the Trustees, is it is their job to release information to the members rather than each committee just putting info out their as they please.

By their own admission none of them is an accounting expert so having people who are, can only be a positive. Whether the Trustees release any info is up to them. If members aren't happy with the info provided by the Trustees then you end up in a situation like now. Yes I know it seems to be required by law but the courts will make the final decision on that.

[356JAGER]

Thanks for that Mic. You are generous to a fault. I am still left wondering why, if an expensive audit by a reputable firm has just proven your shining expertise in this endeavor, for why, and for what, does one need advice if you're already doing a perfect job? Seems like a simple question to me.
Joel

[356JAGER]

UPDATE:
Through the grapevine, word has it that one of the two 'volunteer' auditors has bailed due to the insistence of the trustees that the results of the 'audit' not be revealed to the membership. Perhaps the
other 'auditor' will see the wisdom in his colleague's decision not to participate in a charade. Again one must ask, what's the point of an 'audit' done for the benefit of those being 'audited' ? What is the need for one if you have just paid a large, undisclosed amount of members money for an'independent' audit that those being 'audited ' say shows them to be doing an excellent job ?

[Pat]

As of right now, I can't log onto the Registry site. Anyone know what is wrong? I am a paid up member.

[AMP]

Works fine