Lead Stories

What does a charity do when the value of a bequest grows so large that the income substantially exceeds the amount the charity wants to spend for the purpose of the gift? 

If it is Columbia University with an endowed Chair in Clinical Medicine that throws off more income than the University normally applies to an endowed professorship, it asks the surrogate’s court to allow it to divide the fund to permit the creation of additional professorships.  The Surrogate’s Court in Nassau County, NY, has recently approved such an application.

An appellate court in California has affirmed the disqualification of an attorney for a Sikh religious center after he interviewed 11 members on a list of more than 150 members challenging the merger of two centers.  Although the lawyer said the members told him they were not represented by other counsel, the Court held that there was adequate reason for the disqualification.  (Grewal v. Gurunanak Mission Sikh Center, Ct. of App., CA, Fifth Dist., No. F-57688, 4/27/10.)

May the director of a nonprofit condominium association inspect the records of the association in order to obtain information to pursue her personal lawsuit against the association?

A trial court in California held that she had an absolute right to inspect under the statute and permitted the inspection.  It further prevented the members’ action of removing her from the board from becoming effective until after the inspection was supposed to take place.

A man who lived in subsidized senior housing and failed to tell his lawyer the extent of his estate told his lawyer only that he wanted to keep his legal fees as low as possible. Following instructions, the lawyer produced a simple 2-page will, leaving the income from his securities and bank accounts to two friends, with the residue thereafter to the American Cancer Society and the American Heart Association.

A nonprofit corporation approved at a meeting of an unincorporated association does not succeed to the interests of the association when the members have not received adequate notice of the proposal and have not approved it unanimously, a federal District Court in Virginia has held.  (Bedford Genealogical Society, Inc. v. Bedford Museum and Genealogical Library, W.D. VA, No. 6-09-cv-00060, 5/21/10.)

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