A nonprofit corporation’s bylaw provision for indemnification does not cover reimbursement of a trustee who is a plaintiff in a lawsuit against the corporation unless specifically provided in the bylaw, the Supreme Court of New Jersey has decided recently.  The Court overturned an award of more than $560,000 in legal fees to a trustee who had filed suit to overturn his removal from the Board of his homeowners’ association.

A black paraprofessional may proceed with a suit for discrimination against a nonprofit school that fired him after a disputed incident involving a student.  A federal District Court in Minnesota has denied the school’s motion to dismiss.

A church whose members’ sincerely-held religious belief involves the consumption of a controlled drug is not entitled to 501(c)(3) charitable exemption without having received a waiver from the Drug Enforcement Agency permitting the use of the drug, the Court of Appeals for the District of Columbia has ruled.  It has affirmed the decision of the Internal Revenue Service and the trial court denying exemption.

The founder and several other members of the board of a private school in New York may be sued by the school’s Chapter 7 bankruptcy trustee for breach of fiduciary duty and an accounting, a bankruptcy court has recently held.  The Court rejected the directors’ claims that they were protected from liability by the “business judgment rule,” saying the application of the rule could be determined only after trial.

The 11th Circuit Court of Appeals, in a 2-1 decision, has reversed a trial court refusal to dismiss a challenge to a venture capital fund contest open only to black women entrepreneurs, one of the first of a series of cases challenging the use of race as a criterion for remedial programs to assist historically disadvantaged groups.  The Court has affirmed the trial court conclusion that the plaintiff has standing to bring the case, but overturned the trial court’s refusal to dismiss on the ground that the First Amendment “may bar” the claim on the ground that the contest constitutes ex