Lead Stories

An Islamic charter school is required to indemnify and hold its nonprofit sponsor and the state Commissioner of Education harmless from costs and expenses in defending a suit brought by the American Civil Liberties Union of Minnesota charging that the school promotes Islam in violation of the First Amendment and the state constitution, a federal District Court has held. The provision in the Charter School Contract requiring such indemnification is valid and enforceable, the Court has said. (ACLU of Minnesota v. Tarek Ibn Ziyad Academy, D. MN, No. 09-138, 4/20/11.)

A bankruptcy court in Ohio has allowed two hospital foundations to withdraw from the bankruptcy proceedings involving 18 separate entities within the Forum Health system, despite creditors’ claims that the foundations’ unrestricted assets should be made available to pay the claims of creditors of the other entities.  The Court has held that even though the foundations have the right to give to the other entities, the other entities have no right to take from the foundations.  (In Re Forum Health, Bkrptcy Ct., N.D. OH, No. 09-40795, 3/17/11.)

What should counsel do when board chair “goes rogue”?

An attorney hired by a dissident director of a nonprofit corporation in an attempt to regain control of the organization may not be sued by the nonprofit for malpractice, the Supreme Court of Ohio has ruled. The director did not have authority to hire on behalf of the organization and there was therefore no attorney-client relationship.  (New Destiny Treatment Center v. Wheeler, No 2010-298, 5/18/11.)

A donor disgruntled over the handling of a scholarship fund he created in honor of his parents has won the battle of standing to bring his complaint, but has lost the war in his effort to move the funds.  A federal District Court in Illinois has said that the Seminary that received the gift did not violate the gift agreement.  (Pearson v. Garrett-Evangelical Theological Seminary, N.D. IL, No. 11-cv-0019, 5/13/11.)

The Seventh Circuit Court of Appeals has reversed a Wisconsin District Court decision and held that the Wisconsin fair-dealership law prevents the Girl Scouts of America from forcing the “reorganization” of local chapters over the objection of one of them.  (Girl Scouts of Manitou Council v. Girl Scouts of the United States of America, No. 10-1986, 5/31/11.)