Jump directly to the Content

Breach of Fiduciary Duties

A court ruled that the directors of a charitable trust could be sued for breach of fiduciary duties.

• A New York appeals court ruled that directors of a charitable trust could be sued for breaching their fiduciary duties. A child of the founder of the trust filed a lawsuit seeking to remove 8 of the trust's 11 directors. He asserted that the 8 directors breached their fiduciary duties, mismanaged the trust's investments, and negligently selected the trust's investment advisor. A trial court dismissed the lawsuit on the basis of the "business judgment rule," and the case was appealed. A state appeals court reversed the trial court's judgment, and ruled that the 8 directors could be sued. It began its opinion by noting that the New York Not-For-Profit Corporation Law requires that the officers and directors of a nonprofit corporation "discharge the duties of their respective positions in good faith and with that degree of diligence, care and skill which ordinarily prudent men would ...

Join now to access this member-only content

Become a Member

Already a member? for full access.

Related Topics:
Posted:
  • November 2, 1992

Related ResourcesVisit Store

Essential Guide to Employment Issues for Church Boards
Essential Guide to Employment Issues for Church Boards
Covers selection and screening, dispute resolution, terminations, discrimination, and minimum wage.
Nonprofit Financial Oversight
Nonprofit Financial Oversight
The concise and complete guide for boards and finance committees
Church Board Guide to a Child Sexual Abuse Prevention Policy
Church Board Guide to a Child Sexual Abuse Prevention Policy
Church leaders and boards can take relatively simple, yet effective steps to reduce the likelihood of child sexual abuse.
Church Board Guide to Developing a Risk Management Strategy
Church Board Guide to Developing a Risk Management Strategy
Learn how to develop and implement a risk management strategy in your church.