Transparency issue leads to business litigation

Mardi Gras is part of Louisiana’s culture. But the annual festivities rarely lead to business litigation. A recent dispute arose when some members of the Krewe of Bacchus became upset after membership dues increased. The dissenting members cited a general lack of transparency from the leaders of Bacchus.

In order to address the problem, members are now petitioning the courts to force leaders of the group to follow a state business law regarding the inspection of financial records. The Louisiana law allows any shareholder to inspect the books and financial records of a business. The information also includes the names of other shareholders and the types of disbursements made.

The documents filed with the court claim that Bacchus, one of the principal krewes in the Mardi Gras parade, did not allow members to inspect its financial records after it announced the membership dues increase.

Social media is now getting involved in the situation, and online posts are discussing resignations by Bacchus board members and making general requests for a structural change among the group.

Court documents reveal a court hearing scheduled for mid-August. The hearing is supposed to be a “show-cause” hearing and will give the Krewe of Bacchus an opportunity to explain to a judge why they have not allowed members to look at the records. More importantly, Bacchus will need to explain why it has not followed the law on the subject.

Laws like the one at issue may be complex at times. When business law disputes arise between board members and shareholders, a knowledgeable litigation attorney may be able to provide some insight into the application of the law and the rights of each party.

Source: WWLTV, “Rift between Bacchus members, directors heads to court,” Scott Satchfield, July 30, 2012