IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, CHANCERY DIVISION MOTION TO COMPEL ENFORCEMENT OF JUDGMENT

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1 IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, CHANCERY DIVISION E. Kwan Choi, individually and on behalf of Urantia Foundation, et al., plaintiff, v. K. Richard Keeler, et al., defendants. No. 02 CH In Chancery Injunction Temporary Restraining Order Judge Sophia H. Hall OF JUDGMENT Now comes the plaintiff, Dr. E. Kwan Choi, by his attorneys, Michael D. Poulos, P.C., individually and on behalf of the Urantia Foundation, et al., and petitions for enforcement of the court s judgment entered on August 23, 2002, and in support thereof states as follows: 1. On August 23, 2002 the court entered judgment in favor of the plaintiff and declared that Dr. Choi is still a trustee of the Urantia Foundation with all the rights pertaining thereto. 2. Despite the court s declaration which resolved the dispute over Dr. Choi s status, the defendant trustees have continued to exclude him from all meaningful participation as a trustee by denying him access to the official records of the foundation, by denying him reimbursement for his expenses, and by conducting trustees meetings without notice to him or participation by him. 3. Attached to this Motion is the Affidavit of Dr. Choi in Support of Motion to Compel Enforcement of Judgment with supporting exhibits. The exhibits referenced below are to the exhibits attached to the Affidavit. PAGE 1

2 A. DENIAL OF ACCESS TO RECORDS 1. On September 10, 2002, following the court s declaration that Dr. Choi remains a trustee of the Urantia Foundation, Michael D. Poulos sent a letter (Exhibit A) to S. Patrick McKey, one of the attorneys at Gardner Carton & Douglas representing the defendant trustees, informing him as follows: I am writing you as a courtesy to inform you that Dr. Choi will be visiting the Chicago Urantia office this Thursday, Friday, and Saturday to inspect the facility and its operation, talk with the staff, and review records as is his right and duty as a trustee and director. I assume the staff will extend him every courtesy. 2. Also on September 10, 2002, Dr. Choi sent an to Tonia Baney, executive director of the Urantia Foundation, with a copy to his fellow trustees (Exhibit B) informing them of his visit, stating: Dear Tonia, Now that Judge Hall has confirmed that I am still a trustee, I will be visiting the Urantia Foundation office this Thursday, Friday, and Saturday (September 12, 13 and 14, 2002) to inspect the facility and its operation, talk with the staff, and review records. I am looking forward to seeing you again. Kwan Choi 3. On September 10, 2002, Dr. Choi sent another to Tonia Baney with a copy to his fellow trustees (Exhibit C) specifying the documents he wished to examine and copy pertaining to the Urantia Foundation and its subsidiary corporations. These limited documents concern the safekeeping of the primary trust estate, minutes and financial reports going back to January 1, 2001 when the defendant trustees began to systematically exclude Dr. Choi from access to such information, recent audit reports, and documentation regarding the foreign currency futures funds. Specifically: PAGE 2

3 a. Storage contract for the original plates and first editions of The Urantia Book and proof of payment of current rent or storage fees. b. Minutes and notes of regular and special meetings from January 1, 2001 to the present. c. Quarterly financial reports from January 1, 2001 to the present. d. Audit reports for 1998 to the present. e. Correspondence, applications, prospectuses, agreements, and statements from and to the Superior Ideal Commodities Fund. f. Correspondence, applications, prospectuses, agreements, and statements from and to the Sierra International Currency Fund. g. Account statements from The Northern Trust from January 1, 2001 to the present. h. A list or index of files maintained by the foundation staff if such a list or index exists. i. A list of donations and donors from January 1, 2001 to the present. 4. On September 10, 2002, Michael J. Hayes, one of the attorneys at Gardner Carton & Douglas representing the defendant trustees, wrote to Michael D. Poulos, counsel for Dr. Choi, indicating that Dr. Choi would not be allowed to see the records on the requested date, denying that Dr. Choi was a trustee notwithstanding the court s order, and arguing that, in any event, a trustee needs the permission of Richard Keeler to see documents. (Exhibit D.) There is no such rule. PAGE 3

4 5. Dr. Choi appeared at the office of the Urantia Foundation on Thursday, September 12, Initially he was given the requested audit reports. While this was transpiring, Richard Keeler sent to the Urantia Foundation office a copy of an originally addressed to Dr. Choi but not yet received by him directing that he be denied access to documents. (Exhibit E.) 6. Thereafter, Tonia Baney refused to allow Dr. Choi to see any further documents. 7. Later on Thursday, September 12, 2002, Mr. Hayes wrote to Michael D. Poulos confirming that Dr. Choi would not be allowed access to records of the Urantia Foundation without the permission of Richard Keeler, which permission has still not been granted despite repeated requests. (Exhibit F.) 8. The controversy which underlies this litigation began because Dr. Choi began asking inconvenient questions and requested access to records of the trust estate. It was after this happened that the defendant trustees undertook, unsuccessfully, to remove Dr. Choi as a trustee. 9. At the subsequent meetings of the board on October 19, 2002 and on January 18, 2003, Dr. Choi again requested access to the business records of the foundation. Each time his request was denied. 10. As a trustee of the foundation, Dr. Choi is entitled to all access to any property of the foundation. The Seventh Circuit Court of Appeals has characterized this as an elementary proposition of law: The trustee has the right to the custody and possession of the property included in the trust estate. 65 C.J. 692 and cases cited. It is the trustee s right and duty, and his alone, to proceed by suit or other legal proceedings as necessary to collect or to reduce to possession the property and assets belonging to the estate within a reasonable time, and a failure to perform these duties with due diligence under certain PAGE 4

5 circumstances, renders him personally liable for the resulting loss. 26 R.L.C. Sec. 131; 65 C.J Village of Brookfield v. Pentis, 101 F.2d 516, 521 (7 th Cir. 1939). The trustee s right to possession stems from the trustee s legal title to the assets of the trust. Id. There is no question in the case at bar that the records of the foundation are part of the trust estate, nor is there a question that Dr. Choi is a trustee of the foundation. He is undeniably entitled to inspect and copy any record of the foundation. 11. Even in the corporate context a corporate director cannot be denied inspection or copies of corporate records. Kunin v. Forman Realty Corporation, 21 Ill. App. 2d 221, 225-6, 157 N.E.2d 785, 787 (1 st Dist. 1959). In Kunin a majority of corporate directors sought to deny the plaintiff, also a corporate director, from receiving a copy of the company s audited financial reports. Applying ancient law, the Kunin court found that the plaintiff was entitled to copies of the financial reports. The court stated: [t]he majority of a board of directors can not exclude the minority from knowledge of what the company is doing, or from access to its files and records. Id., quoting, Stone v. Kellogg, 62 Ill. App. 444, (1 st Dist. 1895). The Kunin court held that all executive officers must afford equal and reasonable facilities to all members of the board in their examination of the affairs of the company. Kunin, 21 Ill. App. 2d 221, 225-6, 157 N.E.2d 785, 787. The difficulty or impracticality of making copies is not a defense to a director s right to copy corporate documents. Kunin v. Forman Realty Corporation, 21 Ill. App. 2d 221, 225-6, 157 N.E.2d 785, 787 (1 st Dist. 1959) (finding that the present state of the art of multigraphing, mimeographing, and photostating disposes of any possible defense based on difficulty). 12. The Kunin court further found the real intent of the majority was to cast obstacles in the way of a director s study of the affairs of the corporation and found PAGE 5

6 this to be intolerable. Id. This is precisely what is happening to Dr. Choi. The defendant trustees claim there is a policy or procedure that any request for records must be directed to the board and is responded to by the foundation president. The defendant trustees cite to no such authority, and after seven months and two quarterly meetings they continue to deny him even access to the minutes of the meetings from which the court has already ruled he was unlawfully excluded. This policy is one they have simply made up to impede Dr. Choi from fulfilling his fiduciary duties. As in Kunin, [n]one of these things can be tolerated by the law. Id. 13. As soon as Dr. Choi began his attempt to view records of the Foundation, the defendant trustees resumed their attempts to remove him. (See Affidavit and Exhibits G, H, I, J and K.) This is a repeat of the September, 2001 removal proceedings which likewise immediately followed Dr. Choi s written demand for records. 14. On October 19, 2002 a regular quarterly meeting was held. At that meeting Dr. Choi presented the following resolution: I, Dr. E. Kwan Choi, move that between now and the next quarterly meeting, I be permitted unrestricted and immediate access to all records and property of the Urantia Foundation and its subsidiary corporations, that all employees of the Urantia Foundation and its subsidiary corporations are hereby directed to speak with me fully and truthfully regarding all matters about which I may require, and that I be permitted to copy any material I may wish on equipment of the Urantia Foundation or otherwise at the expense of the Urantia Foundation. For the purpose of this motion I withdraw my standing objections. 15. The motion was tabled to the next quarterly meeting to be held in January 2003 at which time it was not passed. 16. This court held that Dr. Choi is a trustee of the Urantia Foundation. As such he is entitled to unrestricted access to the records and property of the foundation and its subsidiary corporations. PAGE 6

7 B. FAILURE TO PROVIDE NOTICE OF TRUSTEES MEETINGS 1. Without notice to Dr. Choi, on January 17, 2003 (the day before the trustee s regular quarterly meeting), members of the board of trustees met without notice to Dr. Choi and conducted unknown business concerning the financial affairs of the foundation. This meeting of trustees occurred in the form of a finance committee, the membership of which does include Dr. Choi and which is not authorized under the Declaration of Trust and the Bylaws. This so-called finance committee meeting constituted a Special Meeting under 3.3 of the Bylaws and was subject to the notice, location, and timing provisions of that section, none of which was complied with. No minutes of that meeting have been shown to Dr. Choi. (See, Affidavit of E. Kwan Choi in support of Motion to Compel.) 2. The failure to provide any notice to Dr. Choi has prevented him from being present at or participating in any matter of the business of the foundation conducted at the finance committee meeting on January 17, At the regular quarterly meeting of the trustees on the following day, there was no discussion among the trustees of any balance sheet, statement of income or expense, or other financial statements of the foundation. The sole exception was a presentation from the Northern Trust regarding the performance of foundation investments under the control of that institution. 3. The defendant trustees have continued to communicate with each other and conduct business of the Urantia Foundation without including Dr. Choi. 4. On information and belief, the defendant trustees continue to conduct special meetings of trustees under the guise of committees, all for the sole purpose of depriving Dr. Choi of the rights justly declared by the court on August 23, PAGE 7

8 C. REFUSAL TO ALLOW DR. CHOI TO SPEAK TO HIS FELLOW TRUSTEES 1. Following the Court s ruling that Dr. Choi is a trustee of the Urantia Foundation, counsel for the defendant trustees, Michael J. Hayes, whose firm, Gardner Carton & Douglas also represents the Urantia Foundation, wrote to counsel for Dr. Choi prohibiting Dr. Choi from communicating with his fellow trustees or the staff of the Urantia Foundation. (See, Exhibit F.) Despite strong objections to this prohibition since then, including raising objections in the course of a prior petition for a rule to show cause, neither the defendant trustees nor defense counsel has rescinded the prohibition. 2. This edict prevents Dr. Choi from exercising his rights and responsibilities as a trustee and is in obvious derogation of the declaration of the court that Dr. Choi is a trustee of the foundation. The prohibition completely impairs any meaningful participation of Dr. Choi as a co-trustee, especially since the foundation operates through a board of trustees who, through deliberation and majority vote, determine the business of the foundation. The prohibition further acts in contradiction to the Declaration of Trust that calls for a board of trustees consisting of five, not four, members, and the court should compel the defendant trustees to rescind the prohibition in order to provide substantial meaning to the August 23 judgment. Wherefore, the plaintiff, Dr. E. Kwan Choi, asks that the court enter an order enforcing the judgment of August 23, 2002, and compelling the defendant trustees, K. Richard Keeler, Mo Siegel, Gard Jameson, and Georges Michelson DuPont: (a) to cease and desist from conducting the affairs of the foundation to the exclusion of Dr. Choi whether in the form of committee or otherwise; (b) to immediately provide him with notes and minutes of each and every meeting of trustees, whether in the form of committee or otherwise, since September 1, 2001; (c) to cease and desist from PAGE 8

9 withholding from Dr. Choi access to any official record of the foundation without limitation; and to (d) rescind the prohibition that Dr. Choi may not communicate with the defendant trustees. Respectfully Submitted: Michael D. Poulos Attorney for Dr. E. Kwan Choi Attorney Code MICHAEL D. POULOS, P.C. Attorneys for Dr. E. Kwan Choi 1724 Sherman Avenue Evanston, Illinois Telephone Fax PAGE 9

10 IN THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS COUNTY DEPARTMENT, CHANCERY DIVISION E. Kwan Choi, individually and on behalf of Urantia Foundation, et al., plaintiff, v. K. Richard Keeler, et al., defendants. No. 02 CH In Chancery Injunction Temporary Restraining Order Judge Sophia H. Hall AFFIDAVIT OF DR. CHOI IN SUPPORT OF OF JUDGMENT Dr. E. Kwan Choi, under the penalties as provided by law pursuant to paragraph of the Illinois Code of Civil Procedure, states: 1. On September 10, 2002, I caused my attorney to send a letter, a true and accurate copy of which is attached as Exhibit A, to S. Patrick McKey, one of the attorneys at Gardner Carton & Douglas representing the defendant trustees. 2. Also on September 10, 2002, I sent an to Tonia Baney, executive director of the Urantia Foundation, with a copy to my fellow trustees, a true and accurate copy of which is attached as Exhibit B. 3. On September 10, 2002, I sent another to Tonia Baney with a copy to my fellow trustees, a true and accurate copy of which is attached as Exhibit C. 4. Attached as Exhibit D is a true and accurate copy of a letter dated September 10, 2002 from Michael J. Hayes, one of the attorneys at Gardner Carton & Douglas representing the defendant trustees, sent to my attorney, Michael D. Poulos. 5. To my knowledge there is no rule requiring requests for access to foundation documents to be approved by the foundation president. PAGE 1

11 6. On Thursday, September 12, 2002 I appeared at the office of the Urantia Foundation. Initially I was given audit reports I had requested. While this was transpiring, Richard Keeler sent to the Urantia Foundation office a copy of an originally addressed to me but which I had not yet received directing that I be denied access to documents. A true and accurate copy of this is attached as Exhibit E. 7. Thereafter, Tonia Baney refused to allow me to see any further documents. 8. Attached as Exhibit F is a true and accurate copy of a letter dated September 12, 2002 sent by Mr. Hayes to Michael D. Poulos. 9. Attached as Exhibit G is a true and accurate copy of a Notice of Special Meeting dated September 12, 2002 calling for a meeting of the trustees on September 21, 2002 to re-initiate removal proceedings against me. 10. I caused an Objection and Dissent to the September 21, 2002 meeting to be served on the defendant trustees with a cover letter citing reasons why the meeting was improper, a true and accurate copy of which is attached as Exhibit H. 11. The defendant trustees did meet on September 21, They subsequently sent a notice of a second Special Meeting dated October 4, 2002 calling for a special meeting on October 14, 2002 for the purpose of re-initiating my removal a second time, all in an attempt to have the vote to initiate removal prior to the October 19, 2002 quarterly meeting. A true and accurate copy of that notice is attached as Exhibit I. 12. I caused an Objection and Dissent to the October 19, 2002 meeting to be served on the defendant trustees at the meeting with a cover letter citing reasons why the meeting was improper. I also requested items to be placed on the Agenda PAGE 2

12 for the October 19, 2002 Quarterly meeting. A true and accurate copy of these communications are attached as Exhibit J. 13. Attached as Exhibit K is a true and accurate copy of the notice of quarterly meeting for October 19, On October 19, 2002 a regular quarterly meeting was held. At that meeting I presented the following resolution: I, Dr. E. Kwan Choi, move that between now and the next quarterly meeting, I be permitted unrestricted and immediate access to all records and property of the Urantia Foundation and its subsidiary corporations, that all employees of the Urantia Foundation and its subsidiary corporations are hereby directed to speak with me fully and truthfully regarding all matters about which I may require, and that I be permitted to copy any material I may wish on equipment of the Urantia Foundation or otherwise at the expense of the Urantia Foundation. For the purpose of this motion I withdraw my standing objections. 15. The motion was tabled to the next quarterly meeting to be held in January 2003 at which time it was not passed. A true and accurate copy of this resolution, my Objection and Dissent, and my proposed motions served on the Board at the October 19, 2003 quarterly meeting are attached as Exhibit L. 16. I objected to the board s regular quarterly meetings that were scheduled for October 19, 2002 and January 18, 2003, since I had never been informed as to what business had transpired during the period from about September 1, 2001 to August 23, 2002, when the dispute over my claim to office was decided in my favor. These regular quarterly meetings proceeded despite my objection. On these two occasions I again requested the business records I had been seeking, and both times the defendant trustees refused to grant my request and refused to provide me with the information that I needed to function as a trustee. 17. On January 18, 2003, I was first given notice that a finance committee meeting had taken place on the preceding day. This notice was in the form of a note PAGE 3

13 included on some basic financial statements delivered to me that day. The note reads: Hard copies available for committee meetings for Friday, January 17, The use of the plural committee meetings indicates to me that multiple committees met on the 17 th. I was not given any advance notice of committee meetings and neither the Declaration of Trust nor the Bylaws allows for operation of the foundation through the use of committees, other than the board as a whole of which I am a member. 18. At the regular meeting on the 18 th, there was no financial presentation by the treasurer or any trustee discussions regarding the financial statements. A representative from the Northern Trust did make a brief presentation regarding the foundation investments under Northern Trust control, however. 19. I caused an Objection and Dissent and proposed motions to be served on the defendant trustees at the January 18, 2003 quarterly meeting. My motions were variously defeated, tabled, and or not seconded. A true and accurate copy of these documents is attached as Exhibit M. 20. Further Affiant sayeth naught. PAGE 4

14 VERIFICATION BY CERTIFICATION Under the penalties as provided by law pursuant to paragraph of the Illinois Code of Civil Procedure, the undersigned certifies that the statements set forth in this instrument are true and correct, except as to matters stated to be on information and belief, and as to such matters the undersigned certifies as aforesaid that he or she verily believes the same to be true. E. Kwan Choi Attorney Code MICHAEL D. POULOS, P.C. Attorneys for Dr. E. Kwan Choi 1724 Sherman Avenue Evanston, Illinois Telephone Fax PAGE 5