Here's the ONLY thing that matters in these crazy times where you can magically trade BOP loot after someone assigns it:

The GM did not communicate with either the Master Looter, the rest of his guild, OR the person that won the roll at the time in which it mattered.

It's a pretty simple conversation:

Are you planning on tanking more in the future? Would the guild be best served by you having this item over someone who tanks all the time, full time? Can we make a deal that you get it the next time it drops if I get it now?

Demotion or not, If the GM had any problem with it, the time to deal with it was not the next day or after someone logged off, it was immediately when it happened and just have a chat about it. Your guild's never going anywhere when people in the guild feel they can't talk to the GM and the GM can't talk to the members. I wholeheartedly disagree that the time to talk about it was anything except right then, right now. If you wait until later it's way too late. If you do it when someone involved (guildwise, or raidwise) isn't logged on, you make them feel like their input doesn't matter.

And if in any situation having a conversation with your guild about how to run things is considered "drama" then you're in the wrong guild and you can probably find something better. Or at least more established and will stick to the rules for better or worse.

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