NYS Law: DMCNY/DMA Merger Needs 2/3 Member Approval

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Whatever the outcome of a scheduled vote today by the Direct Marketing Club of New York's Board of Directors on whether the club will become a chapter of the Direct Marketing Association, the proposed move will still need the approval of two-thirds of its members.


However, in an 11th hour interview yesterday, DMCNY president Vito Fortuna said the vote will at least make clear who is for the move and who is against it.


"All I'm asking the board is to step up and make a decision and be accountable to the membership," Fortuna said. He added he will make public how individual board members vote.


"If they vote 'no,' [they should] go out to the members and tell them why, but also give them a solution," he said.


Under Section 903 of New York State Not-For-Profit Corporation law, if the DMCNY Board approves a plan for merging or consolidating with the DMA, it and the DMA must first provide notice of a meeting about the plan to their respective members along with a copy of the plan of merger or consolidation, DM News has learned. The plan then needs to be approved by two-thirds vote of the members of both organizations.


Assuming the approval of two-thirds of the membership is obtained, the plan then needs to be submitted to the Supreme Court of the State of New York for its approval. As part of the required Supreme Court approval the court will fix a hearing date and provide notice of the hearing to interested parties including the state attorney general.


Despite animated discussions among board members in the last few days as to the intent of the club's bylaws, the state law governing not-for-profits takes precedence, according to reliable sources.


Fortuna was previously quoted as saying that on the advice of an attorney, a full vote of the club's membership is not needed to become a chapter of the Direct Marketing Association.


Fortuna said he thinks the Board is probably going to vote against the DMCNY becoming a DMA chapter and that a no vote would be a disservice to members.


"Did they really vote with their heart and what's best for the club, or did they vote just to turn around and say, 'We'd rather be independent no matter what?'"


Fortuna also said that if the club was to go under and becoming a DMA chapter has not been considered, there would be backlash from members.


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