Defendant, Cardinal Ethanol, prepares for a "confession of judgment".
"Our operating agreement currently provides that the consent of a majority of the total outstanding membership units entitled to vote is required in order for the Company to confess a judgment in an amount in excess of $500,000.The Board of Directors has concluded that it is in the best interests of the Company to amend the operating agreement to remove this requirement and permit the Board of Directors the flexibility to enter into confessions of judgment on behalf of the Company as part of its authority to manage the business and affairs of the Company.
Accordingly, it is proposed that the Company amend Section 5.7(b) of the operating agreement as follows (crossed out language reflects the change):
(b) The Directors shall not have authority to, and they covenant and agree that they shall not cause the Company to, without the consent of a majority of the Membership Voting Interests:
(i) Merge, consolidate, exchange or otherwise dispose of at one time all or substantially all of the Property, except for a liquidating sale of the Property in connection with the dissolution of the Company;
(ii) (lined through)--->Confess a judgment against the Company in an amount in excess of $500,000;
"DEFINITION of 'Confession Of Judgment' A written agreement signed by the defendant that accepts the liability and amount of damages that was agreed on. A confession of judgment is a way to circumvent normal court proceedings and avoid a lengthy legal process to resolve a dispute." Good Luck To All!$!$
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