Legal Question in Business Law in California

Nonprofit Public Benefit Corporation

Legally, is a school district able to freeze the bank account of a nonprofit corporation of teachers. The corporation is not a part of the school district. Some of the teachers who work in the school district are members of this corporation.

The district wants to take over the assets of the corporation. Because some of the corporation's members are district employees, the district says that it can. The CA. corporate code states that should a corporation dissolve, that the directors and members are to determine where the assets go. Please advise.


Asked on 8/09/00, 2:19 am

1 Answer from Attorneys

John Hayes The John Hayes Law Offices

Re: Nonprofit Public Benefit Corporation

It seems you have a pretty complicated situation on your hands. If the non-profit is a seperate entity from the school district than they shouldn't have the right to freeze anything having to do with that organization unless they have a court order or judgment against the non-profit. You quoted a code section pertaining to the dissolving of a non-profit organization, is the non-profit dissolving? If it is, than the code section applies. However, the wording of the code section does point out that the members run the organization. I would need to know what the district basis its assertion that they can legally freeze the account of the organization and why they are trying to do this in the first place before I can even begin to give you an opinion on where you stand legally. I offer free consultations if you would like to discuss this matter with me in more detail. If I can't help, I can at least point you in the direction of someone who can. You can reach my office toll free at 877-546-9918 or by email at [email protected]. If I don't hear from you I wish you the best of luck and urge you to at least consult with an attorney.

Sincerely,

John Hayes, Esq.

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Answered on 8/16/00, 4:13 am


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