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Smithsonian Gets Cy Pres Power To Modify Display Requirement for Collection

Court allows Institution to display statues online instead of physically in museum facilities
When the widow of British explorer and artist Herbert Ward gave the family collection of 2241 ethnographic objects, including 19 bronze sculptures of Congolese people, to the Smithsonian Institution in 1920, she included a requirement in the agreement that the collection be kept together and that the sculptures be displayed in a room or “reasonably conspicuous part” of the building open to the public “at all times.” In 1960, the Smithsonian decided it was impractical to keep the collection together on permanent display and obtained court permission in 1961 to remove some of the items from permanent display and separate the sculptures from the rest of the collection. In the late 1980s, the...

Amazon Smiles May Reject Alleged Hate Group

Court says religious group did not prove defamation or discrimination on the basis of religion
An alleged hate group may be rejected from the Amazon Smiles donation to charity program, the 11 th Circuit Court of Appeals has held. The Court has affirmed the District Court decision holding that the Southern Poverty Law Center did not defame the group and that Amazon did not discriminate on the basis of religion. Amazon provides 0.5 percent of the purchase price for items bought through Amazon.com to “eligible” charities. A charity must be registered with the IRS and must agree that it will not “engage in, support, encourage, or promote intolerance, hate, terrorism, violence, money laundering, or other illegal activities.” It denies participation to organizations that SPLC designates as...

Supreme Court Says California Cannot Require Filing of Schedule B

Court says requirement violates First Amendment right to freedom of association of donors
After nearly a decade of litigation over whether states may require charities seeking to register to solicit charitable contributions to file a complete copy of their Form 990 tax information return, including an unredacted Schedule B containing the names of significant donors, the 6-3 conservative majority of the U.S. Supreme Court has held that the requirement violates the donors’ First Amendment right of association, a question that is “not even close” according to two of the Justices. In so holding, according to the three dissenting justices, the Court has “discard[ed] its decades-long requirement” that the plaintiffs must plead and prove that disclosure will likely expose them to...

National Rifle Association Fails in Attempt To Use Bankruptcy to Move to Texas

Court dismisses case, saying it was not filed in good faith and was an effort to avoid New York regulatory action
The National Rifle Association, sued last summer by the Attorney General of New York seeking to dissolve the organization and recover large sums from top officials for breach of fiduciary duty, has failed in an effort to use bankruptcy as a vehicle to move the corporation to Texas. A Bankruptcy Court in the Northern District of Texas has ruled that the case was not filed in good faith. The Court agreed with the Attorney General of New York that the NRA was attempting to use the bankruptcy proceeding to address a regulatory enforcement problem, not a financial one. Because it was not filed “for a purpose intended or sanctioned by the Bankruptcy Code,” the Court said, it was not filed in good...

DAF Sponsor Not Liable For Damages in Liquidating Stock

Court finds Fidelity Gift Fund did not breach contract and was not liable for negligence in sale of gift stock
In a long-anticipated ruling, Fidelity Investments Charitable Gift Fund has been found not liable to the donors to a donor advised fund who claimed that they were damaged significantly when Fidelity sold all 1.9 million donated shares of a thinly-traded company in the last 2.5 hours of trading of the last day of trading in December 2017. A magistrate judge in a Federal District Court in California has dismissed all of the donors’ claims. Malcolm and Emily Fairbairn founded a hedge fund where they managed over $3 billion. In 2017, because of a change in the tax law, they recognized about $250 million of off-shore income and decided to make a large charitable contribution to offset some of...

Bankruptcy Stays Suit Against Officeholder of Corporation Sole

Because law is “arcane” and “murky,” Court refuses to impose sanctions on plaintiff who files new case
The Bankruptcy Code provides that all pending or potential claims against the debtor are automatically stayed and may not be pursued when the debtor formally files for bankruptcy protection. But the law also provides that cases are not stayed against non-debtors, including the individual officers of a bankrupt organization. The officers may be sued in their individual capacity except in narrow and unusual circumstances, such as when there is such an identity between the debtor and the third party defendant that the debtor may be said to be the real party defendant and a judgment against the third party defendant will in effect be a judgment against the debtor. The issue of whether the...

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