When a nonprofit with a well-meaning mission finds itself in financial and management distress, myriad legal issues and exposure may confront the corporation’s directors.
In a decision issued on Sept. 22, 2011, in Official Comm. of Unsecured Creditors, on behalf of the Estate of Lemington Home for the Aged v. Baldwin, the Thirrd Circuit Court of Appeals vacated a decision of the District Court for the Western District of Pennsylvania. The district court had granted summary judgment in favor of the defendant directors and officers of a debtor, and dismissed the creditors’ committee’s complaint that alleged causes of action for breach of fiduciary duty and deepening insolvency.
