|Leisure World of Maryland Corporation|
|Sunday, 27 February 2011 18:42|
In 1977, Suburban Bank, Trustee, arranged for the creation by Maryland charter of the Leisure World of Maryland Corporation (LWMC), with the authority to issue 1,000 shares of stock, all of one class, without par value. The Trustee's purpose in creating the corporation was to formalize the management structure of the community by establishing a legal entity that could give normal job security to the staff. Before that time, the management function was in the hands of a manager who established his own company with nothing behind it of permanence if he disappeared from the scene. The connection of his staff with Leisure World existed only through him. The creation of LWMC ended that weakness.
Although no apparent intention to operate at a profit then existed, or now exists, in the mind of any interested party, for some reason LWMC was not registered as a not-for-profit entity. Instead, it was established as an ordinary commercial enterprise. LWMC became management agent for the Trust and for the Mutuals under renewable management and operating agreements defining, among other things, the duties of LWMC. The manager became president of LWMC. His control over LWMC was reinforced by the transfer to him by Suburban Bank of the LWMC stock. However, the bank retained the stock in its own vault, and its arrangement with the president of LWMC provided that the bank would recover legal title to the stock if the president's relationship with LWMC ended.
When the Leisure World Community Corporation was created in 1980, it signed a contract with the Trustee, under which it acquired control of the LWMC stock, but with the same right of recovery by the bank that applied when the former president of LWMC was in office. However, when Suburban Bank resigned as Trustee at the end of 1983 and the Leisure World Community Corporation became Trustee, the bank turned all the shares in LWMC over to the Community Corporation. LWMC is accordingly a wholly owned subsidiary of the Community Corporation. The Board of Directors of LWMC is the Board of Directors of Leisure World Community Corporation. All Board actions as the Board of the Community Corporation are also actions of the Board of LWMC, in accordance with a general resolution adopted by the Board.
The Board now appoints the operating officials of LWMC, the president of which is now known as General Manager and serves under a contract of employment. LWMC continues to make and renew management and operating agreements with the Trustee and the Mutuals defining its duties and authority.
|Last Updated on Sunday, 27 February 2011 18:55|