HLECC Forfeiture of Charter – Law & Our Bylaws

I have brought this up in the past and have to bring it up again for one reason only – the validity of a couple of changes that were made to the HLECC Bylaws during this time of dissolution.  When I first was asked to help with an issue in HLE, I did a lot of research of records.

10/30/1975 – HLECC created as a non-profit Texas corporation which requires that periodic reports be filed with the Texas Secretary of State (TX-SOS), from time to time.

10/22/1993 & 10/27/1993 – The TX-SOS notified the HLECC by mail that their periodic reports had not been filed & they were are risk of forfeiture. HLECC was given another 120 days to file these reports.

02/23/1994 – The TXSOS sent HLECC notification that their ‘right to conduct affairs’ in Texas had been forfeited, and that the HLECC corporation had been ‘involuntarily dissolved’. In the words of the TXSOS, HLECC is ‘declared null & void’.

17 YEARS PASSED BEFORE FURTHER ACTION WAS TAKEN BY HLECC

In 2011 the HLECC corporation was reinstated, but the question remains – ‘Are any governing document changes made during that 17 years valid?  According to Elizabeth S. Miller, Professor of Law at Baylor University School of Law, in her publication – “The Walking Dead”, page 18, item F ( –> Click Here to read ), says that “The statute does not specify the effect of reinstatement other than the cancellation of the nonprofit corporation’s ‘forfeited’ status, and there does not appear to be any case law addressing the effect of the reinstatement with respect to the period during which the corporation was forfeited.”

I had to look up info on the forfeiture law because there were multiple changes to the governing document during this ‘forfeited’ time period.  The question I asked myself is ‘was HLECC a valid corporation and where the contracts, legal actions, etc.. that they took during this time valid and enforceable.  My personal decision is that unless there is some tested case law to uphold either position, I am not going to get into it.  The HLECC can, however, get legal counsel to try to find out.  For the sake of publishing documents, I will publish them on this website and note that they were done during forfeiture.

Here is a screen shot from the SOS office records that shows this dissolution (forfeiture).

dissolution

2 Comments

  1. Katrina Schierenberg

    After the HOA was dissolved in 1993 how was it reinstated in 2011 without the property owners vote? If a person bought into the Community during those 17 years how can one be held accountable to the Restrictions and/or By LAws? They took monies from us under the guise of being an HOA? What are my legal rights in this application?

    Reply
    • hleowner

      Deed restrictions go with the land, not with the corporation. So, anything on the deed restrictions will stay in tact. If the POA is dissolved, the county, for the sake of property values, may (or may not) enforce the deed restrictions. What happened is that the corporation was ‘reinstated’ before anyone knew it was not a valid company. According to state law, that allows them to do business as if they were never forfeited. Welcome to Texas !!

      Reply

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