Lead Stories

After the officers and directors of the Lemington Home for the Aged concluded that operation of the Home was no longer financially viable and decided to file for Chapter 11 bankruptcy, the Official Committee of Unsecured Creditors sought to increase the funds available for distribution by suing them for breach of fiduciary duty, self-dealing, and “deepening insolvency.”  A federal District Court in Pittsburgh has dismissed all three claims.  (Official Committee of Unsecured

An appellate court in New York has affirmed an order enforcing $900,000 in pledges from a foundation to St. Bonaventure University and dismissing a declaratory judgment action seeking to invalidate them.

The University had obtained the pledges as part of a capital campaign to expand its library.  The foundation argued that the pledges should not be enforced because they were subject to certain conditions and restrictions that were not stated in the pledge agreements.  The Court said that when a pledge is made in writing, unless conditions are expressed or at least implied in the document, state law prevents evidence beyond the written document from being used to prove such conditions, except to show a condition precedent that would cause the agreement to be ineffective.

A putative class action suit brought by a former employee of Wells Fargo Bank in Iowa, who claimed that the bank lacked statutory authority to use payroll deductions to process voluntary charitable contributions from employees, has been dismissed by a federal District Court.  The Court said that the deductions were permitted as a “lawful purpose accruing to the benefit of the employee[s].”  (Ferezy v. Wells Fargo Bank, S.D. IA, No. 4:09-cv-00455, 12/21/10.)

When a volunteer who ran a charity’s major annual fundraising event for five years decided that she no longer wanted to be involved with the charity, she and her husband sought to run a similar event, using the same name, for another charity in the same community.  The volunteers and the charity each filed to trademark the name of the event, and then commenced litigation seeking to prevent the other from using the name.  A federal District Court in Philadelphia has ruled that the charity is the proper owner of the name and issued a preliminary injunction to prevent the volunteers

For 48 years, the Archbishop of Hartford (CT) gave the income from a charitable trust to the Particular Council of the St. Vincent dePaul Society in Hartford.  When Mary Manning executed her will in the 1930s, she provided for a trust upon her death to pay income to relatives for life and then to five charities, including “the Roman Catholic Bishop of Hartford for use by him for the work of The St. Vincent dePaul Society.”

Membership is a church is not necessarily the same as being a member of a corporation with voting rights and the right to elect trustees or directors, a Court of Appeals in Ohio has said.  It has affirmed a trial court decision dismissing a claim by new trustees, recently “elected” by members of the church, seeking confirmation that they had ousted the old board.  (Revelation Spiritual Church of Christ v. Tussey, Ct. of App. OH, Twelth Dist., No.CA2010-03-058, 12/29/10.)