Below are varied true cases involving actions against non-profit organizations and their directors for acts of alleged mismanagement:

Discontinued Service

A business networking organization ceased their support and assistance in an annual event that acted as a major draw for townsfolk and tourists, allegedly resulting in significant losses to local business owners who looked forward to the economic benefits the activity brought to the area.  Suit was brought against the directors suggesting their decision was unreasonable and had resulted in financial harm to the organization's members.  

Mismanaged Fundraiser

The employee of a community services organization is alleged to have overzealously 'pitched' its fundraiser to a supplier.  The supplier, a manufacturer of products, accuses the organization and its employee of misrepresentation.  The legal pleadings filed in court suggest that the supplier was 'duped' into reducing its current production in effort of deminishing local supply prior to the fundraiser as well as taking out loans for the purchase of additional equipment that would be necessary to accomodate the substantial anticipated production.  It was noted by the manufacturer that they had been told that 50 local schools were to participate by having their students sell the products in a door-to-door campaign.  Ultimately the fundraiser did not go as planned and the manufacturer is seeking compensation for losses. 

Membership Suspension

Members of an athletic club were suspended for inappropriate conduct resulting in a claim brought forth against the association and its president for an injunction against the suspension and damages.  The plaintiffs were successful, receiving compensation as well as being reinstated as members. 

Breach of Fiduciary Duty

A foundation, established for the purpose of running an international event, received a federal government grant earmarked to finance the event.  Later, it was discovered that the foundation had exceeded their revenue with incurred expenses.  A government investigation concluded that the grant money had been used not as initially represented by the foundation.  Claim was brought against the directors and officers for misrepresentation regarding the use of the funds and breach of fiuciary duties. 

Proprietary Dispute

An art gallery received valued pieces for display.  Following the passing of the donor, heirs have no sued alleging ownership and requesting return of the artwork.  This case is ongoing with substantial costs in legal fees.  For more information regarding this case, 'click here'.

Discipline Committee Sued

A professional association investigated a member after a former client filed a complaint.  The investigation was completed and no charges brought forth following a year long review by the discipline committee.  The professional sued alleging negligence in the delays surrounding the investigation caused adverse affect to his reputation and loss of business.

Benefit Administration Error

A social services association agreed to increase unionized employees death benefit but forgot to ask their insurance broker to increase the limit of coverage provided by their coverage plan.  Following an employees death, the widow sued the board of directors for the difference in the promised amount and the insured amount.

Parental Neglect

Recently we received advisement from a national non-profit organization of litigation against the directors suggesting mismanagement in which the case involved a child (represented by a legal guardian) who sued her parents for neglect.  The suit named the organization and directors for which the parents were allegedly overly consumed in their volunteerism and therefore inattentive to their parental duties.  While the court eventually ‘let the organization off the hook’, considerable legal expenses were incurred.  As the organization carried no director’s liability insurance, it bore the full cost of defending itself and indemnifying the directors.

Mismanaged Funds

When a wealthy family made a substantial donation to a foundation, it was expected that the monies be 'earmarked' for a specific cause.  After spending the money for another purpose, one that seriously contradicted the donors strong religious beliefs, action was made against the directors to recoup the funds.