The Missouri Baptist Foundation lost its final appeal Sept. 20 in the legal action filed against it by the Missouri Baptist Convention 14 years ago. As a result, current trustees will be required to surrender governance to MBC-elected trustees.
The state Supreme Court denied the Foundation’s application to transfer its appeal of a judgment issued by the Circuit Court of Cole County, Missouri, in October 2014.
“The judgment held that the Foundation in 2001 acted contrary to law when it amended its articles to provide for a self-perpetuating Board of Trustees,” according to a Foundation news release after learning of the Supreme Court’s decision.
“The judgment ordered the current Board of Trustees to step aside and be replaced by other trustees elected in accord with corporate articles of incorporation which were in effect prior to the amendments made in 2001,” the release explained.
Larry Guess, chair of the outgoing board, responded on behalf of trustees.
“While we are disappointed in the Supreme Court’s decision, we will respect and follow the judgment of the Circuit Court of Cole County,” he said.
“The current members of the Board of Trustees have faithfully performed their duties for the Foundation during the 14 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,” Guess said.
“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,” he pledged. “We will do all we can to assure a smooth transition and the preservation of the best interests of the Foundation’s clients.”
At the close of the second quarter of 2016, the Foundation reported $115 million in assets under management.
“We are so grateful for the Supreme Court’s final decision, which ends an arduous legal battle over governance of the Foundation,” said MBC Executive Director John Yeats in an article posted on the MBC website.
“We eagerly welcome the Foundation back into the MBC family, and we look forward to a smooth transition for the benefit of all investors,” he said.
Yeats tried to reassure Foundation investors that they should not experience any change in day-to-day operation of the Foundation’s services.
“Our issue over the last 15 years has not been one of financial management but of governance,” he said. “The question has always 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.”
The MBC originally filed suit in 2012 against the Foundation and four other entities — Windermere Baptist Conference Center, Missouri Baptist College (now University), The Baptist Home and Word & Way. The boards of all five had taken action to self-elect their trustees rather than to accept trustees elected by messengers to the MBC annual meeting each year.
While all five were named in a single suit, the court separated them out with trial consideration one at a time. The circuit court ruled in favor of Windermere in 2008, a decision the appeals court upheld in 2009. The MBC voluntarily withdrew its claims against Word & Way a year later.
Cases against The Baptist Home and Missouri Baptist University are pending.