Pryor Cashman client, Hadassah, the Women's Zionist Organization of America, Inc., the largest women's Zionist organization in the United States, has defeated a lawsuit brought in the Southern District of New York by Hadassah Academic College in Israel ("HAC"). HAC, a past beneficiary of Hadassah's largesse, received millions of dollars over several decades and claimed that Hadassah failed to forward funds donated to it for HAC's benefit.
HAC's Complaint for breach of fiduciary duty, accounting, conversion, unjust enrichment and imposition of a constructive trust was dismissed in its entirety. In disputing the suit, Hadassah argued that HAC lacked standing to sue, because, in New York, absent special circumstances, only the Attorney General may challenge the actions of a not-for-profit corporation. Judge Analisa Torres agreed, finding that the funds at issue belonged entirely to Hadassah and the law "protects charitable assets from being wasted in litigation involving potentially numerous parties who may be disappointed by a not-for-profit organization's decisions, but who have no legal right or entitlement to receive donations." HAC had no special interest in the funds and "allowing HAC to sue Hadassah would 'set a precedent of allowing [every former and potential future beneficiary] to commence multiple actions against a charitable trust.'"
The court's full decision can be read here.
The Pryor Cashman Team
Representing Hadassah in this matter were Daniel Kurtz, head of Pryor Cashman's Nonprofit + Tax-Exempt Organizations Group, Partners Shveta Kakar and James O'Brien and Associate Alex Goldberg.
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