Mo. Attorney General files motion in Bank of America lawsuit to protect JCC charitable assets

By David Baugher, Special to the Jewish Light

The Missouri Attorney General’s office has filed papers in federal court seeking the right to intervene in Bank of America’s case against the Jewish Community Center.

“The Jewish Community Center is one of the most important and historic charitable institutions in our state,” said Attorney General Chris Koster in  astatement released to media.  “While I recognize that this is a difficult situation for all involved, I am committed to ensuring that the assets of this charitable institution are fairly treated throughout these proceedings.”

ADVERTISEMENT
What's My Home Worth? ad


The motion, made late last week, is the latest development in the financial giant’s suit against the JCC which Bank of America launched in March in an effort to collect roughly $4 million it says it is owed by the community institution. The suit alleged that the JCC was withholding payment of monies under a revolving line of credit and bond redemptions in order to force the restructuring of tens of millions of dollars in bond loans it owes.

The bank said it believes the organization has the ability to pay while the JCC contends that it has worked hard to settle the issue amicably.

The exact implications of this week’s action, in which Koster sought permission from the court to intervene in the matter under federal rules, were unclear but the Attorney General’s motion said it was being made in order to safeguard the public’s interest in a philanthropic concern.

“Donations to a not-for-profit, public benefit corporation are public assets held in trust by JCC for the exclusive benefit of the public,” read the filing. “In effect, BOA is asking this court to remove the public as the equitable beneficiary of the JCC’s donations and pledges and substitute BOA as the new beneficiary of those funds. As the public’s exclusive representative regarding charitable assets held in trust, the Attorney General of Missouri should be granted leave to intervene in this action to protect the public’s interest in JCC’s charitable assets.”

The JCC praised Koster’s decision. A statement released by JCC president and CEO Lynn Wittels said the agency was “grateful” to Koster for the move which she said came in response to “an aggressive legal maneuver” by the bank in filing its earlier suit.

“The State is seeking to protect the J — a non-profit organization that serves tens of thousands of members of this community —from the Bank of America’s effort to, in effect, seize our assets,” said Wittels in the statement. “The bank’s amended complaint would do that by having the court establish a constructive trust for the bank’s sole benefit.  If the bank were to succeed, our not-for-profit assets would thereby be converted into bank assets, which are certainly not charitable and certainly not the purpose for which they were intended.”

Wittels said Koster is authorized by law to protect charitable interests.

“His defense of one of the St. Louis area’s key community organizations is both entirely appropriate and deeply appreciated,” read the JCC statement.

The statement said the JCC continues to operate normally and remains committed to finding a resolution with Bank of America.

Interviewed by the Jewish Light, Wittels said she did not know what effect Koster’s action would ultimately have and didn’t know how common such a move was though she said it was not unprecedented.

“It’s almost impossible to predict what impact it may have because a lot depends on how Bank of America responds,” she said.

Contacted for comment, a representative for the bank released a short statement via email.

“As you know we filed litigation in this matter, and that litigation speaks for itself,” it said. “However, we continue to work with the JCC and have ongoing discussions to resolve the litigation.”

Koster’s office declined to comment beyond the release it issued announcing the motion.