The Missouri Baptist Convention’s governance of the Missouri Baptist Foundation must be restored, the Missouri Court of Appeals – Western District ruled May 24.
The decision 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 appeals court ruling, announced by Chief Judge Alok Ahuja, upholds all facets of an October 2014 judgment by the Circuit Court of Cole County ordering the restoration of foundation governance to MBC-elected trustees.
The foundation appealed the trial decision to the Missouri appeals court, which heard arguments in September 2015 and handed down its decision May 24 to end some 15 years of control by a self-appointed, self-perpetuating trustee board. The foundation may appeal the ruling to the Missouri Supreme Court – its final option after repeated setbacks in the lower courts.
The appeals court, in its ruling, 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.’”
Repercussions for the breakaway foundation included Midwestern Baptist Theological Seminary trustees voting unanimously in 2003 to remove about $877,000 in funds and re-invest those funds with the Baptist Foundation of Oklahoma.
“We are so grateful for the court’s decisive ruling,” said John Yeats, the Missouri convention’s executive director. “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.”
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 of this year.
In 2001 the board of the foundation broke from the MBC, changing its charter in violation of a charter clause requiring MBC consent. The purported amendments declaring its board self-perpetuating also violated MBC governing documents.
After months of seeking private reconciliation and even binding Christian arbitration – all of which the self-perpetuating board rejected – the MBC sought a declaratory judgment for a judge’s interpretation of the law and documents, as a last resort to return the foundation to Missouri Baptists.
“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 MBC’s mission of transforming lives and communities with the gospel,” Yeats said.
The Missouri 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 entity’s charters contain a consent clause similar to the foundation’s, so the May 24 appeals court ruling may be vital to the resolution of the other cases.
The Word & Way has been replaced by The Pathway newsjournal of the convention.
(EDITOR’S NOTE – Reported by the communications staff of the Missouri Baptist Convention and Baptist Press senior editor Art Toalston.)