Question

willie ann Madison incorporated Cherokee Children & Family services inc. (CCFs) as a nonprofit pub- lic benefit corporation and was its executive director. CCFs was to provide childcare brokerage ser- vices to low-income families. The corporation had no members. its income was almost exclusively state and federal grants. CCFs paid for travel to Hawaii, personal travel the next year, and a trip to London—all by Madison and several of her relatives. Madison was regularly paid bonuses of 50 percent of her salary. she bought a building and leased it to CCFs (signing on behalf of CCFs) for five years at an annual rent of $49,932. During the first year, the lease was renegotiated at a retroac- tive annual rent of $72,000. Prior to expiration, the lease was renegotiated again to reflect leasing 20,000 square feet, although the building had only 9,700 square feet, at an annual rent of $210,000. The next year, three members of the board of directors approved the payment of "prorated back rent" for the contract period. This was $210,000 rent times five, minus what CCFs had paid in rent to Madison. This amounted to $437,000 and was paid to Madison’s company. The state attorney gen- eral sued to dissolve CCFs, saying it had abandoned its public purpose and had become devoted to private gain. should it be dissolved?

Answer 1

Answer: Yes it should be dissolved due to the fact that they had derailed from their core mandate of providing children brokerage services to low income families.

Step-by-step explanation:

A non profit public benefit corporation is a non profit making organization whose purpose of establishing it is to contribute their quota towards improving the life's of people they primarily established the corporation to serve.it may be a club, unions, charitable organization, and societies. It is main findings comes from donations from members of the public, organizing a fund raising activities, and government grant . Through these sources they secure the needed funds to carry out their activities of improving the life's of the people they want to serve.

However, in the case of Cherokee children and family services inc( CCF) who was established as a non profit public benefit corporation and whose income was exclusively from state and federal grant. The state attorney general is right to have sued to dissolve CCFs due to the fact that they had abandoned its public purpose and had become devoted to private gain. It should be dissolved because they had derailed from their core mandate of providing children brokerage services to low income families.

Answer 2

Yes it should be dissolved as it is clearly evident from the data provided that Madison started benefitting from a company created as a public benefit corporation.

Step-by-step explanation:

The state attorney general sued to dissolve CCFs, saying it had abandoned its public purpose and had become devoted to private gain.

This statement is valid on basis of following reasons

• The payment of personal travels for Madison and several of her relatives by CCF is not rationalized.
• The purchase of the building had been a specific case if it is not affiliated with the CCFs
• The initial rent contract is signed by the Madison on both sides which clearly indicates a conflict of interest.
• During the first year again the lease is renegotiated but the signing authority on both side was same
• Further the next leasing agreement portrayed the erroneous display of square footage but the issue is not raised by the CCF side as the signing authority of both the sides is same.

In light of all the above statements, there is a conflict of interest and a public company is used to benefit personal gains. Thus the company should be dissolved.