Mo. Supreme Court returns entity to state convention

by Missouri Pathway Staff, posted Wednesday, September 21, 2016 (one year ago)

JEFFERSON CITY, Mo. (BP) -- The Missouri Baptist Foundation is coming home to the Missouri Baptist Convention.

The Missouri Supreme Court declined Tuesday (Sept. 20) to hear the foundation's appeal of an appeals court decision ordering its return to governance by convention-elected trustees.

By letting a May 24 ruling by the Missouri Court of Appeals -- Western District stand, the state Supreme Court ended 14 years of litigation that began in 2002 after the foundation's board broke away from the convention the previous year, changing its charter in violation of a charter clause requiring MBC consent. The amendments declaring its board self-perpetuating also violated MBC governing documents.

After months of seeking private reconciliation and even binding Christian arbitration -- all rejected by the foundation's self-perpetuating board -- the convention asked a circuit court for a declaratory judgment, seeking a judge's interpretation of the law and corporate documents as the only legal recourse to restore the foundation to the convention. The action was taken in accord with Missouri Baptists' vote in their October 2001 annual meeting to direct the convention to seek a judicial ruling. More than a decade of lower-court proceedings ensued.

In October 2014 the Circuit Court of Cole County ordered the restoration of foundation governance to the MBC-elected board of trustees.

The foundation, with $150 million in assets, appealed the trial decision to the Missouri Court of Appeals, which heard arguments in September 2015 and handed down a decision on May 24 of this year.

That decision, written by Chief Judge Alok Ahuja for a unanimous three-judge panel, restored the foundation's governance to the convention. As a last resort, the foundation appealed to the Missouri Supreme Court, which declined to hear the case Sept. 20, leaving the decision of the appellate court in effect.

What happens now?

The Supreme Court's decision empowers the Circuit Court of Cole County to oversee the legal transfer of governance back to the convention. The trustees elected by Missouri Baptists are to be installed as the breakaway board is vacated.

It is expected that this transition will be completed within a few months.

"We are so grateful for the Supreme Court's final decision, which ends an arduous legal battle over governance of the foundation," said John Yeats, MBC executive director. "We eagerly welcome the foundation back into the MBC family and we look forward to a smooth transition for the benefit of all investors."

Yeats emphasized that investors should not experience any change in day-to-day operation of the foundation or in the services provided.

"Our issue ... has not been one of financial management but of governance," Yeats said. "The question always has been, 'Who has the legal right and fiduciary responsibility to govern the foundation?' We have argued that it is a board of trustees duly elected by Missouri Baptists -- and the courts have affirmed that position."

Randy Comer, who serves as chairman of the Missouri convention's Agency Restoration Group, said, "On behalf of the ARG, we want to thank Missouri Baptists for their prayers and steadfast support. We joyfully welcome the foundation back to the MBC family and ask the Lord to continue to show us His favor in the days ahead."

Larry Guess, outgoing trustee chair of the foundation, issued the following statement:

"While we are disappointed in the Supreme Court's decision, we will respect and follow the judgment of the Circuit Court of Cole County. The current members of the Board of Trustees have faithfully performed their duties for the Foundation during the fourteen years of the litigation with representatives of the Missouri Baptist Convention, and the commitment those Trustees have shown to the mission and ministry of the Foundation will not end today. Each member of the Board stands ready to do all in his or her power to assist the new members of the Board as they take office and begin the work of managing the Foundation going forward. We will do all we can to assure a smooth transition and the preservation of the best interests of the Foundation's clients."

Two other MBC entities that broke from the convention in 2001 -- The Baptist Home and Missouri Baptist University -- have consent clauses in their charters that are nearly identical charters to those of the foundation. The MBC intends to ask the Circuit Court of Cole County to grant a summary judgment to the convention, effectively restoring governance of the two entities to MBC-elected trustees.

Missouri Baptists "showed remarkable patience and resilience" during the years of litigation, Yeats said. "It is with a thankful heart that I say their faithfulness is now rewarded."

Reported by the staff of The Pathway (www.mbcpathway.com), newsjournal for the Missouri Baptist Convention.
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