Lead Stories

A bank trustee that took a little more than two months to distribute trust funds to charities during the precipitous drop in stock prices in late 2008 is not liable for a breach of fiduciary duty under the circumstances of the case, an appellate court in California has affirmed.  (Estate of Gilliland, Hi-Desert Memorial Hospital v. Union Bank of California, Ct. of App. CA, Second Dist., Div.

Trustees of Girard College, a free elementary and secondary school for disadvantaged youth in Philadelphia, have been denied a request to eliminate their residential and high school programs temporarily in order to rebuild their reserves to assure the long-term viability of their programs.  The Pennsylvania Commonwealth Court has affirmed an Orphans’ Court decision denying the request.  (Estate of Stephen Girard, No. 2254 C.D. 2014, 1/21/16.) 

An appellate court in New York has permitted three churches to remove restrictions on permissible investments imposed by the same donor in his will.  The donor had said that the churches could invest the bequests only in insured bank accounts and government securities.  (In Re: Estate of Chamberlin, Sup. Ct., App. Div., Third Dept., NY, 1/7/16.)

Members of Congress who were outraged that the IRS held up applications by conservative organizations for 501(c)(4) social welfare exemption, which arose in part because the IRS did not know what type and how much political activity is permitted for a (c)(4) organization, have prohibited the IRS from finalizing regulations defining the type and extent of permitted political activity before the 2016 Presidential election. 

The Pennsylvania Supreme Court has overruled the Commonwealth Court’s opinion in “Redacted v. Redacted” and allowed the state Attorney General to proceed against several charities and their officers using information allegedly disclosed by the charity’s attorney in violation of her obligation to preserve confidentiality.  The Supreme Court has said that evidence should be admitted in the case “based on established evidentiary principles and not the broader Code of Professional Conduct.” 

A federal District Court in Indiana has entirely dismissed a suit brought by the son of the founders of a family foundation who claimed that the foundation’s board was not properly constituted and that grants awarded by the board are unlawful.  He complained particularly about grants to a university on whose board one of the foundation’s directors sits.  (Doermer v. Callen, N.D. IN, No. 2:15-CV-154, 11/9/15.)