Lead Stories

A charitable limited liability company providing subsidized housing and supportive services for residents re-entering the community is eligible for real estate tax exemption in Pennsylvania, the Commonwealth Court has held, even though the supportive services are provided through a contract with its sole member parent organization and not by the LLC itself.  The Court found for the LLC despite a recent ruling by the state Supreme Court that the activities of a sole member parent and an LLC must be treated separately in determining questions of state tax exemption.

The Third Circuit Court of Appeals has affirmed a District Court decision holding that the directors of a Florida nonprofit corporation have a fiduciary duty only to the corporation and not to the individual members. (See Nonprofit Issues^®, Vol. XXXV, No. 1)

A trial court in Manhattan has been called upon to interpret the bylaws of what is purportedly the oldest black Baptist church in the state of New York in order to determine whether the recently elected pastor was validly elected.  It has interpreted the Church’s bylaws to include a word that isn’t there.

A federal District Court in Delaware has held that neither a quadriplegic individual nor any of six organizations, apparently all nonprofits supporting rights for the disabled, has standing to challenge the validity of Delaware’s End of Life Options Act (“EOLOA”) that permits physician-assisted suicide of terminally ill patients.  The Court has also ruled on a request for a temporary restraining order that the plaintiffs would not be likely to prevail on the merits.

The federal District Court in Texas hearing the challenge to the constitutionality of the so-called “Johnson Amendment” that prohibits charities from participating in election campaigns has denied a request by Americans United for Separation of Church and State to intervene in the case.

A former director’s derivative suit for breach of fiduciary duty against the CEO of a nonprofit corporation has been dismissed by a trial court and appellate court in California on the ground that the plaintiff was not actually a director at the time he filed the suit.  The former director claimed that he was still on the board because the deciding vote to oust him was cast by a director who had been automatically dropped from the board by a bylaw terminating anyone who had missed three consecutive meetings.