Lead Stories

A receiver appointed to collect assets dissipated by the perpetrator of a Ponzi scheme has been permitted to pursue a recovery action against a nonprofit private school that received “purported charitable donations” of more than $900,000 directly from the fraudulent partnership and another $200,000 from a foundation that received it from the partnership.  A federal District Court in Philadelphia has denied the school’s motion to dismiss the case.  (Hecht v

When a bicyclist riding in Central Park in New York City was injured in an accident with a cyclist riding in a race organized by the New York Triathlon Club, he sued the City for damages.  He claimed that the City failed to exercise reasonable care to prevent foreseeable dangers that arose from allowing the race to proceed on park roads while the roads were being used simultaneously by the general public.

A nonprofit mental health agency’s insurance does not cover a claim for medical malpractice against an agency physician who prescribed drugs for a former private care patient who was not a client of the agency.  The 6th Circuit Court of Appeals has affirmed a District Court decision that the physician was not acting within the scope of his employment.

An appellate court in Texas has ruled that notice of a meeting of a nonprofit’s nominating committee was ineffective when sent to committee members only by electronic mail and not by one of the methods for providing notice set forth in the bylaws of the corporation.  The ruling came in a lengthy opinion denying summary judgment to both sides in a dispute over elections in a homeowners’ association.  (Swonke v.

The Tax Court has agreed with the IRS that a nonprofit sperm bank distributing the sperm of a single man does not advance the public health and is therefore not qualified for 501(c)(3) charitable exemption.

William C. Naylor, Jr., a software engineer who holds more than 10 patents on various inventions, created a nonprofit public benefit corporation in California in 2003.  Its purpose was to provide free sperm from Naylor to women seeking to become pregnant through artificial insemination or in vitro fertilization.  He advertised the availability on the Internet.

A Court of Appeals in Texas has ruled that a trial court must strike pleadings filed on behalf of a nonprofit corporation when the attorneys who filed the case were selected by one faction within the organization and cannot show authority to act on behalf of the corporation.  (In Re: Salazar, Ct. of App., TX, Second Dist., No. 2-09-405, CV, 6/25/10.)