Missouri Baptist Convention and the Incredible Vanishing Corporations
by Michael Whitehead

Tell the truth and trust the people.
Is anyone willing to print the facts and law so Baptists can know the truth? The facts are not that complicated. For example, The Baptist Home Charter said:

Article VII, Section 1 "This corporation shall be affiliated with and subject to the Missouri Baptist Convention. The members of the Board of Trustees of this corporation shall be nominated and elected by the Missouri Baptist Convention at the Annual Meeting of said Convention and shall automatically be removed upon withdrawal of the approval by the Missouri Baptist Convention or the Executive Board of Missouri Baptist Convention."

Article IX "This agreement of the corporation may be amended by an affirmative vote of two-thirds (2/3) of the members of the Board of Trustees at any meeting of the said Board of Trustees provided written notice of the amendment and the proposed wording thereof is mailed to each Trustee at least thirty (30) days prior to the date of said meeting by the Secretary of the corporation, and provided said Amendment is approved by the Missouri Baptist Convention."

Now, it doesn't take a room full of Philadelphia lawyers to explain the meaning of the words "provided said amendment is approved by the Missouri Baptist Convention." And even a room full of Philadelphia lawyers cannot hide the meaning.

But the Baptist Home lawyers think they have found a loop-hole. They cite a 1995 Missouri statute, 355.606, which again, is pretty simple:

"The articles may require an amendment to the articles or bylaws to be approved in writing by a specified person or persons other than the board. Such an article provision may only be amended with the approval in writing of such person or persons."

Baptist Home lawyers say the 1960 Baptist Home Charter requires MBC approval but fails to use the phrase "in writing" like the 1995 statute does. Therefore, the lawyers say, the 1960 charter clause "violates" the 1995 statute. And-Presto-- the charter clause is void! The board can amend its charter without the approval of the MBC, written or not.

Now, that's legal magic! Five corporations worth nearly $100 million dollars just disappear from the control of MBC because of a wonderful loophole in the law. That's better than David Copperfield's trick of making the Statue of Liberty vanish. But the legal David Copperfield is different. After the disappearing act, he won't make the agencies come back.

But the tricksters overlooked another piece of the statutory puzzle. Notice above that the Baptist Home charter gave the MBC the right to elect its trustees. What do you call the persons in your church who have the right to vote for leaders? Baptists know--you call them members. In the same way, the Missouri Non-Profit Corporation Code defines "member" as follows:

"Member", without regard to what a person is called in the articles or bylaws, any person or persons who on more than one occasion, pursuant to a provision of a corporation's articles or bylaws, have the right to vote for the election of a director or directors." R.S. Mo. §355.066 (21)

In a local church, members have ultimate control over their governing documents: church constitution, bylaws, etc. Likewise, in a Missouri non-profit corporation, the charter cannot be amended without approval of the members.1 The statutes say that a member is anyone who has the right to elect trustees. MBC had the right to elect trustees of all five agencies. That makes the MBC the "sole member" of each of the agencies. That means the agencies can't amend their charters without MBC approval. Does this sound familiar? It is the same result that is required in the Baptist Home charter and in 355.606 above.

The Baptist Home argument reminds us of a quote by another famous Baptist lawyer who said "That depends on what the definition of is, is." Law and common sense tell us that statutes cannot be applied retroactively to take away the substantive rights of the Missouri Baptist Convention.2 The MBC approval clauses in the charters would doubtless be upheld as lawful and binding, and §355.606 would be interpreted to require approvals to be in writing. Hence the putative amendments were invalid because MBC did not approve in writing, but expressly disapproved in writing.

Keep your eye on the ball.
The agencies don't want to talk about the above facts and statutes, but want to shift the focus onto several side issues. But even as you glance at the side issues with your peripheral vision, keep your eye on the ball: the charters and statutes say that the agencies cannot legally amend their charters without MBC approval.

The Big Fib.
The agency press release asserts that MBC leaders "chose not to meet with any of the institutions prior to making the report public." This statement is simply untrue. We sent the agencies the report the last week of March, before the Executive Board had even seen it. The report was released to the Baptist public after the Executive Board received the report on April 9. But remember to keep your eye on the ball: the charters and statutes say that the agencies cannot legally amend their charters without MBC approval.

"The Pot Calling The Kettle Black."
The agencies make press releases to attack the MBC for making press releases. MBC does not apologize for telling Baptists publicly about Baptist business. These are not private businesses with the right to keep secrets from Missouri Baptists. But keep your eye on the ball: the charters and statutes say that the agencies cannot legally amend their charters without MBC approval.

"What did your lawyer say to you in private?"
The agencies demand to see the letters from the three law firms hired by the MBC, but the agencies do not offer to disclose their lawyers' letters. In fact, the five agencies have not publicly released any of the correspondence between their attorneys and the agencies over the past several years when this conspiracy was being planned. They consider that to be "attorney client" privileged information. As the old saying goes, "what's good for the goose is good for the gander."

Obviously, attorney-client letters contain some discussion of facts, and strategies and personalities that should be kept confidential during the course of a dispute resolution. Perhaps these letters will become public someday, -- after the disputes are resolved. Meanwhile, keep your eye on the ball. The ball is not what the lawyers say in private to their clients about legal strategy. The ball is: the charters and statutes say that the agencies cannot legally amend their charters without MBC approval.

"It's too complicated for you to understand."
The agencies attack the MBC report as "legally superficial" but they can offer only a superficial explanation for their actions. The agencies want us to believe that their actions were clearly legal, if only we understood the law. So help us understand the law. The charters and statutes say that the agencies cannot legally amend their charters without MBC approval. Tell us some law or facts which change that clear and simple rule. The agency press release implies that their legal analysis is very deep, very sophisticated, and not capable of simple explanation, unlike the Whitehead report. So release the "point-by-point analysis" that responds to the Whitehead report. Maybe we're smart enough to understand it after all.

Law is not just for the lawyers. Laws are written to be understood and obeyed by all citizens. And these laws are not hard to understand - or to obey -- unless you are looking for loopholes, to try to do some fancy "legal magic." If the laws are so complicated, maybe some lawyer made a mistake in interpreting it. If the issues are so complicated that only the lawyers can know what is legal, the issues were too complicated to act upon without approval by the MBC.

It's really not that complicated. Keep your eye on the ball: the charters and statutes say that the agencies cannot legally amend their charters without MBC approval.

Ascending liability.
The only explanation that the agencies offer is that they voted to become independent so as to protect the MBC from lawsuits. If someone is injured at the Baptist Home, the agencies did not want a lawsuit filed against the MBC as well. Nothing about this legal theory can justify secret votes to become self-perpetuating. If this was a genuine concern, bring it to the MBC and recommend charter changes.

Bob Allen, ABP reporter gave his honest opinion about the motives of the agencies:

" Last year, five Missouri Baptist Convention agencies switched to self-perpetuating trustee boards to guard against takeover. The convention responded by escrowing funds and threatening legal action to reclaim control of those agencies." 3

Concern for ascending liability cannot justify violations of the charter and law. Keep your eye on the ball: the charters and statutes say that the agencies cannot legally amend their charters without MBC approval.

Innocent Victims of Inflammatory Rhetoric.
There is much wailing and gnashing of teeth by the agencies about the "inflammatory rhetoric" of the Whitehead report. They give no examples of flaming barbs. Apparently they take offense to the words "violation of §355.066 and 355.606." And they don't like the tone of the recommendation that the agencies should give back control of the MBC agencies to the MBC.

The MBC legal task force report is not filled with inflammatory rhetoric. It is factual and straightforward. The problem is that the concerted taking of these five corporations is so outrageous that the report may sound inflammatory when it just describes the facts.

Legal Amnesia.
The agencies must suffer from legal amnesia when they forget about the inflammatory rhetoric they have been dishing out. In November, their lawyers threatened Missouri Convention trustees with arrest for criminal trespassing if they just showed up at a board meeting. In March, their lawyers threatened to sue the convention and executive board members individually to force them to turn over the escrowed funds. Some convention leaders found this rhetoric to be a bit over-heated to be helpful. How odd that agencies and their journalistic advocates forget these pesky details from the recent past.

We have made no threats. We have investigated the facts and law. MBC continues, in good faith, to extend the offer to meet, to talk and pray with the five agencies. Will you meet to pray and talk? Yes or no. No Baptist leader needs legal counsel to answer that question.

A Time for Courage.
Some agency trustees based their vote on legal advice they received. They sincerely believed they were following the law. Now they see the ball more clearly: the charters and statutes say that the agencies cannot legally amend their charters without MBC approval. Even if they think that self-perpetuating boards are a good thing for the agencies, you cannot do right by doing wrong. Its time to make a motion to reconsider their votes, and to rescind the unauthorized charters. That will be the first step toward peace. The first step toward doing the right thing-in the right way.


1One of the statutory rights of a member is to approve charter amendments. §R.S. Mo. 355.556. A board cannot unilaterally amend its charter to become independent and self-perpetuating, without strict notice requirements and member approval. §355.611

2 A legislature cannot "interfere or change by subsequent legislative acts the contract created upon … incorporation…. ." State v. Holekamp Lumber Co., 331 S.W.2d 171 at 179 (Mo. App. 1960.) Also see Article I, Section 13 of the Missouri Constitution, and Article I, Section 10 of the US Constitution.

3 Associated Baptist Press, April 21, 2002.


Michael K. Whitehead is the legal advisor to the Missouri Baptist Convention Executive Committee's Legal Opinion Task Force.

 

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