The Missouri Court of Appeals has denied a motion by the Missouri Baptist Foundation to reconsider its ruling that the foundation return trustee governance to the Missouri Baptist Convention (MBC).
The July 5 ruling affirmed a unanimous three-judge panel’s ruling May 24 to return the foundation to the Missouri convention after 15 years of control by a self-appointed, self-perpetuating board. The foundation motion asked for a rehearing before all 11 judges of the Western District Court of Appeals in Kansas City.
An appeal to the Missouri Supreme Court is the foundation’s final option after repeated setbacks in the lower courts. After all appeals are exhausted, the case will return to the Circuit Court of Cole County to supervise the transition to convention-elected trustees.
The Court of Appeals’ July 5 ruling is among an array of court proceedings stemming from actions by breakaway trustees of the foundation, with $150 million in assets, and four other Missouri Baptist Convention entities in 2000-2001.
The May 24 appeals court ruling upheld an October 2014 judgment by the Cole County circuit court ordering the restoration of foundation governance to MBC-elected trustees. The foundation appealed the trial decision to the Missouri appeals court, with a three-judge panel hearing arguments in September 2015.
The appeals court, in its May 24 ruling, had stated that “the Convention has standing to challenge the Foundation’s disregard of provisions of its organizational documents which gave the Convention the right to review and approve any amendments.”
The court cited a 1994 charter of the 70-year-old Missouri Baptist Foundation defining it as “a charitable corporation” under Missouri statutes “to support the mission of Missouri Baptists by ‘developing, managing and distributing financial resources … as the trust service agency of the Missouri Baptist Convention.’”
The appeals court also left standing a lower-court ruling on attorney’s fees and costs for the litigation. The trial court had ordered the foundation to pay the convention’s legal fees and costs, finding intentional misconduct on the part of the trustees of the breakaway board.
Church Mutual Insurance paid the MBC $5 million to settle the fee claim in January 2015.
The Missouri convention, prior to seeking a declaratory legal judgment, had offered private reconciliation and then binding Christian arbitration but the foundation’s self-perpetuating board declined the overtures.
The Baptist foundation was one of five MBC subsidiary corporations which broke from the convention in 2000-2001 by changing their charters to create self-perpetuating trustee boards. The other breakaway entities are the 1,300-acre Windermere Baptist Conference Center along the Lake of the Ozarks, Missouri Baptist University, The Baptist Home retirement center and Word & Way newsjournal.
Although the breakaway Windermere board continues to exist, the conference center deeded about 970 acres to a lender about 10 years ago in lieu of foreclosure, leading to the 2014 recovery by the MBC of 970 acres for $1.6 million, a heavily discounted price.
Convention court action continues for recovering Missouri Baptist University and The Baptist Home retirement center. Both entities’ charters contain a consent clause similar to the foundation’s, so the appeals court rulings may be vital to the resolution of the other cases.
The Word & Way has been replaced by The Pathway as newsjournal of the convention.
John Yeats, executive director of the Missouri Baptist Convention, noted after the May 24 appeals court ruling, “We are eager to welcome the foundation back into the MBC family, and we look forward to a smooth transition in governance for the benefit of all investors.”
Yeats, quoted in The Pathway, newsjournal of the Missouri convention, said, “Our prayer, and our humble desire before God, is that the foundation’s self-appointed board would graciously acknowledge the court’s ruling and end the prolonged legal battles that have been a distraction to the cooperative mission of MBC churches.”
(EDITOR’S NOTE – Reported by the staff of The Pathway, mbcpathway.com, newsjournal of the Missouri Baptist Convention, and by Baptist Press senior editor Art Toalston.)