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User avatar
By SlopeSkimmer
#400436
Last year we at Big Air Hang Gliding paid 4700 dollars for insurance through the RRRG. In order to purchase this insurance, we also had to buy into the company with a stock purchase of 500 shares at 1 dollar per share. This year we decided to go with another insurance company and purchased a policy to start the day before the RRRG insurance policy ended. Not long after the RRRG policy ended we got the following letter from the RRRG. Does anyone know if this is legal?
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User avatar
By dbotos
#400441
Michael,

I'm assuming you have a copy of the RRRG Subscription Agreement they reference in the letter. Can you post it here?

Unless there's some other law that invalidates it, it sounds like there was a clause in the Subscription Agreement that says you have to stay on for 5 years or else you essentially forfeit the money you paid for the shares of stock. You could always check the wording and see if it says 5 *consecutive* years. :wink: I'm not a lawyer, though, so my free advice is probably worth what you paid for it. Real lawyers charge a lot more and what you pay one to pursue this may quickly eclipse the $500 amount in dispute.

David
User avatar
By SlopeSkimmer
#400451
dbotos wrote:
Wed Sep 27, 2017 12:29 pm
Michael,
I'm assuming you have a copy of the RRRG Subscription Agreement they reference in the letter. Can you post it here?
David
David,

I can not find the agreement they are talking about. It was most likely sent via email but it is not in any of my mac files. I did write the entire board asking for a copy of the document but did not receive a single reply. I sent it to all of these RRRG officials. I guess they are all too busy to tend their customers.

Tim Herr - lawyer for the RRRG.
Bill Bolosky - President of the RRRG.
Ross Wisdom - Treasurer of the RRRG.
David (Randy) Leggett - Board Member
Mark Forbes - Board Member
Steve Kroop - Board Member
Patricia Henderson - Board Member/Insurance Specialist @ Strategic Risk Solutions
User avatar
By mgforbes
#400452
The applicable clause from the RRG Subscription Agreement is this:
(d) Reduction in Redemption Price. The Redemption Price payable to a
Subscriber for Shares shall be reduced by the Reduction Amount (as defined below) in
the event (i) the Subscriber is the subject of a Triggering Event described in Sections
4.3(b), 4.3(c), 4.3(d) or 4.3(e) above; or (ii) the written notice from the Subscriber to the
Company pursuant to Section 4.3(a) above was provided within the Minimum
Commitment following the Effective Date. If the Redemption Price is less than $5000,
the Reduction Amount shall be 100%. If the Redemption Price is at least $5,000, the
Reduction Amount shall be 50%.

The time commitment is defined here:
3.4 Commitment to Company. Each Subscriber may be required to commit to
remain an Active Subscriber for a fixed period of time to provide the Company with stability that
will foster its success. Initial Subscribers will be required to make a commitment of not less than
five (5) full consecutive Policy years. In the event that a Subscriber breaches the Minimum
Commitment to remain an Active Subscriber for the full period of the commitment, the
breaching Subscriber shall be subject to the reduction in Redemption Price set forth in Section
4.5(d) of this Agreement. A Subscriber will not be deemed to have breached the Minimum
Commitment to remain an Active Subscriber if the Company cancels or fails to renew the
Subscriber’s Policy for underwriting reasons pursuant to Section 4.3(f) of this Agreement.

Obtaining insurance as a Small Business Flight School, through membership in PASA, does not require
a minimum term and an investment in RRG ownership. Large Business Flight Schools, by contrast
are directly insured by the RRG, and must be part-owners of the RRG under federal law. The
minimum ownership level is $500, and many LBFS have invested significantly more than that.
The maximum that a LBFS may invest is $100,000. We encourage small schools to choose the
PASA-membership option, unless they are large enough and committed for the long term to
being insured by the RRG.

The agreement was provided to Mike, and signed by him before coverage was bound. I do
not have a copy of his signed agreement available to me at the moment, but the RRG can
not issue a policy without having that signed document in hand first.

MGF
User avatar
By hgflyer
#400453
I do
not have a copy of his signed agreement available to me at the moment, but the RRG can
not issue a policy without having that signed document in hand first.

?
User avatar
By hgflyer
#400454
It's been over a year Mark Forbes. Just talked with a landowner on September 24th of this year (this past Sunday). Who is also waiting for a copy of the insurance policy or template. That offers commercial liability insurance for paid instruction.

I've worked long and hard. In efforts to opening a new training site. 2011 to be exact! And yet? No response from you or the ushpa to show proof of insurance? My emails to Jugdeep Aggarwal (Region 2 director). State clearly my goals and objectives.

Still waiting......
User avatar
By mgforbes
#400455
Not sure who you are in real life, so it's hard to respond. I haven't seen any email from you requesting a copy of the commercial policy issued to schools.

MGF
User avatar
By hgflyer
#400456
It has been over a years time, since the landowner and I. Have sent text, emails, left voice messages. Asking for a template of the RRRG commercial liability policy.

I can understand how you forgot!
User avatar
By SlopeSkimmer
#400458
Oh hey Mark! AfterTim Herr refused to answer any of my emails, I sent this letter to you, Tim, Bill, Ross, Randy, Steve and Patricia on 9/14/17. Maybe it went to all of your spam boxes. I am glad I got a hold of you here so you can take care of this. If the agreement really does have some obscure legal mumbo jumbo that allows you to keep my money then so be it. At least then it would only be morally wrong but not legally wrong.

Read the letter Mark.

Hello all,

In my quest to figure out the legalities of the RRRG keeping my 500 shares of series B common stock. I have contacted the Securities Division Department of Financial Regulation for the state of Vermont. They have asked me for a couple documents mentioned in your "Termination of Membership" letter dated July 18, 2017. The two documents are the “Liability Risk Retention Act” (LRRA) and the “Recreation Risk Retention Group Subscription Agreement.” I can not find my copy of the Big Air Hang Gliding subscription agreement and I am not familiar with the LRRA. I was hoping one of you would have copies of these documents for Mr. Carrigan to look over.

I have cc"d Mr. Carrigan so you may send the documents directly to him and me. Thank you for help.

Best regards,
Mike Jefferson
Big Air Hang Gliding

Letter also sent to:
Tim Herr - lawyer for the RRRG.
Bill Bolosky - President of the RRRG.
Ross Wisdom - Treasurer of the RRRG.
David (Randy) Leggett - Board Member
Mark Forbes - Board Member
Steve Kroop - Board Member
Patricia Henderson - Board Member/Insurance Specialist @ Strategic Risk Solutions
User avatar
By TjW
#400466
Does anybody else notice a certain "tone" about the correspondence from the RRRG?

The assumption seems to be that the RRRG is an aggrieved party.
Another way of looking at it is that someone unsatisfied either with price or service declined to continue a business relationship.

There's probably lots of background stuff I don't know. But I wonder if people who opt out of phone contracts early get such a snarky response?
User avatar
By AIRTHUG
#400468
SlopeSkimmer wrote:
Wed Sep 27, 2017 10:36 pm
I guess they are all too busy to tend their customers.
As they are reminding you of the agreement you... well... agreed to...
I guess I will remind you... you're not their customer (anymore).

In fact... it sounds a bit like you're becoming an adversary, starting to pursue legal action against them. Not sure if you have much experience working in/for a large company or organization, but the very moment someone even hints at filing legal action, they turn communicating with them into a liability, and it is common/standard practice to cease all communications, especially written such as email.

I'm not saying that's what they are doing here... I'm not involved other than on this public thread on this public forum... but if that IS the case- which is likely- any and all communication with you will either be through their attorney, or at least reviewed by their attorney first... and either one of those greatly slows response time!
Last edited by AIRTHUG on Thu Sep 28, 2017 11:46 am, edited 1 time in total.
User avatar
By AIRTHUG
#400469
mgforbes wrote:
Wed Sep 27, 2017 11:05 pm
Obtaining insurance as a Small Business Flight School, through membership in PASA, does not require
a minimum term and an investment in RRG ownership. Large Business Flight Schools, by contrast
are directly insured by the RRG, and must be part-owners of the RRG under federal law.
If this is true- and if you say it is then I have no doubt it's true- then it becomes much more understandable why Mike's shares must be transferred from his ownership.

Is the means of that transfer also stipulated by Fed law? Looking at this from the RRG's perspective, we could understand the need to 'rely' on a stable balance of available funds, and why people's investments would have a time requirement, and even why the RRG can not release that investment should the duration term be broken early.

*HOWEVER* - If the Federal law only states owners must also be insureds, and insureds must be owners... and if the RRG must protect it's financial reserves... couldn't Mike at least SELL his shares to another insured school, or to a school in the process of becoming insured? Then RRRG's account doesn't lose the $500, and Mike is no longer an uninsured owner, AND he can recoup at least some of his investment? Even if he sold his $500's worth of shares for $10... that's two beers worth he isn't getting now!

I think we get that these are the terms of the agreement, and that he signed it... and as such he's bound to these terms. Although if he wanted to operate as a hang gliding instructor, he didn't have a whole lot of choice but to sign... but still, it's a choice he made in order to continue teaching. It's just kinda sad to hear the RRG has language in there that says they'll eat your lunch if you leave them. Unless that buy-back-at-zero-dollers thing is defined by Fed law too?

If not... I would respectfully recommend/request that clause be revisited and hopefully revised to be more in the spirit of "take care of eachother" and "this insurance company was formed to support flight instructors and the sport of free flight"...

Lastly- I'd like to publicly thank Mark Forbes for all of his time and effort in all things free-flight-insurance related the past bunch-o-years. I'm certain not a single one of us can fathom quite how much he's put in to keep things going. And, knowing Mark personally, I can absolutely attest to his character- he is doing his very best, FOR ALL OF US. When faced with the myriad of choices that must be made, he's not just doing his best, but choosing what he believes to be best and right for all... often that means balancing many factors and seeking compromises... and often that leads to making VERY HARD choices with repercussions no one really wants. I certainly don't understand all this insurance mess like Mark does... probably no other human on the entire planet knows more about our specific little tiny unique thing we have going here. We are in many ways chartering new territory... and- like this clause that will hopefully be reviewed- it's a process, an evolution. Just like flying! :D

RV - out... :run:
User avatar
By remmoore
#400505
bickford frederick wrote:
Sat Sep 30, 2017 4:27 pm
What year was it when USHGA let paraglider pilots join?
Now, now - be nice. We need to try to keep a good relationship with our PG brethren. It won't be long before we're begging them to let us stay in their organization.

RM
User avatar
By mgforbes
#400509
Paragliders? Long before 1996. From the BOD meeting minutes (conveniently archived on the USHPA website in case you want to peruse them yourself) there was a paragliding committee meeting chaired by GW Meadows in the spring of 1988.
So, coming up on 30 years ago this spring.

Not sure what this has to do with the RRG and our insurance, though. If you're trying to posit the idea that crashes involving paragliders have a disproportionate effect on our insurance claims, then I'll tell you right now that it's not true.

MGF
By bickford frederick
#400513
I was just wondering when the paraglider pilots got into USHGA. Thanks for the answer Mark.
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