MBC wins Appeals Court ruling in Foundation case
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Kansas City, MO - May 24, 2016 -The Missouri Court of Appeals – Western District today ruled that the Missouri Baptist Foundation must return governance to board members elected by the Missouri Baptist Convention.
The decision, announced by Chief Judge Alok Ahuja, restores governance of the Foundation to the MBC after more than a decade of control by a self-perpetuating board, with about $150 million in assets under management. Two other appeals judges concurred in the 3-0 decision, Rex Gabbert and Margene Burnett.
The ruling upholds all facets of an October 2014 judgment by the Circuit Court of Cole County, which ordered the restoration of Foundation governance to the MBC-elected board of trustees.
The Foundation appealed the trial decision to the Missouri Court of Appeals, which heard arguments in September 2015 and then handed down its decision this morning.
“We are so grateful for the Court’s decisive ruling today,” said John Yeats, MBC 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 Foundation may appeal the ruling to the Missouri Supreme Court – its final option after repeated setbacks in the lower courts. If ruling becomes final, the matter will return to the Cole County Judge for implementation. The ruling might also help resolve the cases still pending against the Missouri Baptist University and the Baptist Home.
In 2001 the board of the Foundation broke away 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 declaratory judgment, seeking a judge’s interpretation of the law and documents, as a last resort to return the Foundation to Missouri Baptists.
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.
“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.
Charters for Missouri Baptist University and the Baptist Home have similar “consent” clauses, so the appellate decision becomes important precedent regarding future court rulings on those agencies.
Kansas City attorneys Michael and Jonathan Whitehead serve as convention legal counsel.