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Expelled Member of Association Can’t Plead “Freeze-Out” or Retaliation

Former commander of Order of Purple Heart also loses on fiduciary duty, effort to disqualify counsel
The former commander of the Military Order of the Purple Heart has lost on all claims against the Order and various officers for what he alleged was an improper expulsion. The Court of Appeals of Mississippi has affirmed a trial court decision dismissing all claims. ( Cook v. Wallot, Ct. of App., MS, No. 2011-CA-01056-COA, 5/7/13 .) While national commander of the organization in 2007, Henry J. Cook began an investigation into the alleged mismanagement of charitable funds by the Military Order of the Purple Heart Service Foundation, which raised funds to support the operations of the Order. The allegations received national media attention and created confusion about the activities of the Order itself. Several members of the Order’s finance committee filed a grievance against Cook.

League Treasurer Gets 5 Years For Misusing Funds for His Own Business

Juror’s concern for “really good person” is not basis to overturn unanimous verdict
A juror’s letter to the trial judge expressing concern over the fate of a “really good person” does not provide the basis for overturning a five year sentence for the treasurer of a youth hockey league who admitted that he used more than $290,000 in league funds to keep his business afloat. An appellate court in New Jersey has denied the treasurer’s request for a new trial and rejected his claim that he did not have a fiduciary relationship with the league. ( State v. Stern, Superior Ct., NJ, App. Div., No. A-4744-10T1, 4/30/13 .) Michael Stern was the volunteer treasurer of a youth hockey league. He admitted that he had written about 155 checks to himself, his business, or cash totaling $...

Directors Accused of Personal Benefit May Not Be ‘Independent’ to Decide on Suit

Court questions role of accused directors in deciding whether derivative action should proceed
Directors of a homeowners’ association accused of obtaining personal benefit from their allocation of limited road construction and maintenance funds may not be sufficiently “independent” to determine whether a derivative suit brought against them by other homeowners is in the best interests of the corporation, the Utah Supreme Court has ruled. It has reversed a trial court decision dismissing the case when the committee conducted an investigation and recommended that the suit be dismissed. ( Hi-Country Property Rights Group v. Emmer , Supreme Ct., UT, No. 20120202, 6/7/13. )

City Loses Right To Appoint Hospital Board

Hospital amended bylaws to eliminate City Council’s right to name directors
A city council lost its right to name directors to the local hospital board when the hospital board amended its bylaws to eliminate the City’s power to appoint, and the City had no standing to contest the action, the Supreme Court of West Virginia has ruled. ( City of Fairmount v. Fairmount General Hospital , Supreme Ct., WV, No. 12-0205, 6/5/13. )

Booster Club Loses Exemption Because of Fundraising Program

Booster Club Loses Exemption Because of Fundraising Program
A booster club fundraising program that allowed parents to meet the mandatory assessment for their children’s participation by raising funds from others has cost the club its 501(c)(3) charitable exemption. The Tax Court has upheld the IRS’s revocation of exemption. The Court ruled that the club “operated in a manner that allowed substantial private inurement and promoted private, non-public interests.” The Court concluded that the club did not operate exclusively for charitable purposes. The Capital Gymnastics Booster Club served as an organization to support youth gymnasts at the Capital Gymnastics National Training Center in Virginia, a separate for-profit corporation. Each athlete’s...

Nonprofit’s Documents Sent to Official May Be Public Records Subject To Disclosure

Where Cabinet member serves on University board ex officio, Court says nonprofit’s communications are records of Department
The Pennsylvania Commonwealth Court has held that communications between Penn State University and the state Secretary of Education, who serves on the University’s board ex officio , are public records subject to disclosure under the state’s Right to Know Law. But because the Office of Open Records did not determine whether any of the Department’s arguments that statutory exceptions to disclosure applied, the Court remanded the case for further determination of what, if any, records must actually be disclosed. ( Bagwell v Pennsylvania Department of Education , Commonwealth Ct., PA, No. 1916 C.D. 2012, 7/19/13. )

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