Special—01-15-2011
Minutes
Signant Two Holdings Ltd. 2011 Special Meeting
January 15, 2011
All 6 Shareholders were present: Sharyn, Vic, Duane, Dale, Sheila and Rhonda (via Skype)
12:05 PM Meeting called to order by Duane following a scrumptious lunch and after establishing a Skype connection with Rhonda
Timeframe of 2 hours decided by the group and Duane asked Dale to be our timekeeper.
(Please note that in these minutes the secretary has rearranged the order of presentation of a few points in the discussion in order to connect motions to their pertinent discussions.)
Discussion of Issues Surrounding the Possibility of Sale of Cabin
Passing the Cabin on to the next generation Duane invited a round–‐table sharing of what our children have said to us about the future of the cabin and the possibility of selling.
Following are some of the salient points mentioned. (These can be modified if someone
feels that they made an important point that is not included.)
Duane – Carrie and Andrew want Duane to enjoy his portion of the value of the cabin.
Sharyn – Her children feel that she should benefit from the value of Fintry and that she should not have to dread the yearly meeting.
Dale – His children can’t imagine life without the cabin. However, Dale isn’t sure we would be doing them a favour passing it on since the challenges will be even more demanding, given their numbers. We are only six individuals. Is it viable?
Vic – We do our children a service by not passing it on. It is not at all viable. They have (sadness over losing it, but) they don’t comprehend what is involved in maintaining and operating the cabin.
Rhonda – Due to geography (Halifax) it has been impossible for her family to enjoy the cabin in the same way as those who live close to it. The challenges over the past 2 or 3 years have carried hurt and frustration. She is planning her move to Ireland for 2–‐3 years from now, which will make her use of the cabin even
less frequent. Rhonda added that her memories of Fintry are connected with Mom and Dad being there and it isn’t the same for her now, without them there.
Sheila – Her children were shocked and saddened, and find it hard to imagine not having the cabin in their lives. Stephen said he would sooner be able to visit the cabin for a week every 3 years rather than never be able to go there again.
Further related discussion – It was noted by Vic that we can decide about selling the cabin and then make other decisions about the timeframe and to whom it would be sold (i.e. whether we want to entertain the possibility of one or a few Shareholders buying out the others).
MOTION #1:
Duane moved that in the best interests of our families, we, the Shareholders, sell the cabin.
Seconded by Sharyn; passed unanimously.
Discussion of the possibility of agreeing to sell the cabin, but to postpone doing so for, say, 3 or 5 years, in view of the need for (emotional) “closure” on the part of some or all
Shareholders and their families and in view of the soft market, presently.
Discussion:
Duane first asked if there were any Shareholders interested in purchasing the cabin. No one expressed interest.
Many positive comments were made regarding giving ourselves a bit of time (e.g. 3–‐5 years) prior to putting the cabin up for sale.
Dale suggested that we keep in mind that we could still do renovations to the cabin, and that doing so would enhance the cabin and perhaps add to its attractiveness for selling.
All agreed that the bathroom definitely needs to be renovated.
Duane reiterated an idea that has come up at previous AGM meetings: that we need to be careful about how much money we put into the cabin as it may be bulldozed by a new owner since their idea of what they want may be completely different from any improvements we might do to the cabin.
Rhonda stated her agreement with Duane’s caution about renovations. Others nodded agreement.
Sheila added that there is the imminent cost of the new Regional District Water System, about which she has heard an estimated cost of
$10,000.00 per homeowner. As well, there is the possibility that our septic tank may not qualify for hookup to the new water system and may need significant upgrading or even replacement.
Sharyn passed on from Jennifer the fact that our Fintry account has approximately $25,000.00 presently.
MOTION #2:
Sheila moved that we commence the process of selling the cabin no later than April 1, 2014, with an anticipated possession date on or before December 31, 2014.
Seconded by Duane; passed unanimously. MOTION #3:
Dale moved that we give further thought to items 1C and 1D of today’s agenda by the date of our next general meeting, October 15, 2011
Seconded by Vic, passed unanimously.
Item “e” – Capital Gains Tax and Individual Taxes involved in selling the cabin. Each Shareholder has the information which Sheila received from her accountant.
Item “f” – Clarification of “Transfer Tax” mentioned in Item 13 of the USA
Vic was uncertain if there would be any Transfer Tax involved in selling the cabin and said it is something we would need to ask our realtor at the time of selling the cabin.
Item “g” – Clarification of the term “assessed value” in item 13 of the USA, given that the “assessed value” by an independent appraiser would probably indicate a greater value for the cabin than the “assessed value” in the Property Assessment from BC Assessment.
Vic conveyed that the “assessed value” means the Property Assessment from the government and that this value was chosen in order to simplify the task when the formula would be
used to calculate the value of shares. Otherwise, there could be disagreement among
Shareholders regarding what the actual value of the property was, at a given time.
Dale asked that Item 1G be put on the October 15, 2011 agenda for discussion.
Item “h,” Harmonized Sales Tax – Sheila conveyed that her accountant thought we probably would not have to charge the HST on the sale of the cabin for 2 reasons. Firstly, Signant Two is not registered to collect the HST. Secondly, there was no GST or HST in 1994 when we purchased the cabin from Mom and Dad. So it was sold to us without GST and can probably be sold to an individual without GST. This, however, will need further investigation when the cabin is sold in order to be certain.
Other considerations, implications or information to be aware of or to research in considering selling the cabin – none were brought forward for discussion.
Immediate discontinuation of yearly fees until the status of Fintry has been determined
Ongoing Maintenance Items noted:
dock
septic system (Dale indicated that we need to have a professional appraiser determine whether ours will qualify for hookup to the new water system – cost of appraisal $1,000.00
MOTION #4
Sheila moved that the annual fees be reduced to two instalments of $750.00 each following the existing payment schedule.
Seconded by Vic; passed unanimously.
Fire Insurance for the cabin
Vic reported that he had called “Monex,” our insurance company for the cabin. He explained the situation of our cabin being one that has heavy use during the summer months and its closure in the winter. Vic was told that someone must go there every 60 days. Everyone was satisfied that this requisite is covered. (Secretary’s note: It was not stated, but satisfaction with this information implies that with Dale’s visits to the cabin, this requisite is covered, in our minds.)
Dale moved that we adjourn. FUTURE DATES:
Next meeting: Noon, Saturday, October 15, 2011 at Duane’s, beginning with lunch (AGM)
Present Items for AGM (Items taken from agenda for Special Meeting, January 15, 2011, and moved forward for further discussion at AGM)
“1C” – Option of Signant Two selling the cabin to someone outside the family
“1D” – Option of individual Shareholders selling their shares to other Shareholders and the option of all Shareholders selling to one Shareholder
“1G” – Item 13, “Purchase Price,” in the AGM (The following is a revision of this item by the secretary, in view of the clarification by Vic of the
term “assessed value” at January 15, 2011 meeting )
Shareholders to discuss whether to change the term, ”assessed value” to, for example, “the value that Shareholders agree upon based on the appraisal of an Independent Appraiser (or more than one Independent Appraiser).”
Possible revision of the Item 13 (USA) formula for determining the value of shares that are sold amongst Shareholders.
Workbee Easter 2011
A reminder that at the last AGM we decided to have a workbee at Easter of 2011 “to renovate the main bathroom, including a new tub surround, glass block in window opening, ventilation fan, floor tile, new fixtures and removal of the old electric heater. We will address any mold issues that arise in this process We will also pull
up the carpet in the half bath, address any mold issues, and install tile and new fixtures.”
(Secretary’s note: In view of our decision to sell the cabin in 3 years, we may wish to consider revising this list. We all have agreed that we want to renovate the bathrooms; however, a glass block in the window opening and a ventilation fan in the main bathroom may not be considered necessary expenditures, for example, in view of the intention to sell and in view of Duane’s suggestion at the meeting that we be careful about how much money we put into the cabin from here forward since new owners might bulldoze it.
Perhaps Shareholders could think about revising this list of tasks now and forward their ideas to Duane, our president, cc’ing to all so that we can make a decision now and not have to revisit this question at Easter. Please indicate whether you wish to attend the workbee. Space in the cabin is
limited and it may be that not everyone who wishes to will be able to participate.
Deciding on the tasks for the workbee now would help Dale to know which materials he needs to buy for the project and he could purchase these at his convenience prior to the workbee. Sharyn and Jim have suggested that perhaps Mike might be free and willing to help with this Easter project.
Jim has offered to help and he and Sharyn will contact Mike and let us all know about his availability.)
Minutes respectfully submitted by Sheila, Jan 16, 2011