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SBC dropped from lawsuit involving gift annuities

NASHVILLE, Tenn. (BP)–The Southern Baptist Convention has been dismissed from the gift annuities lawsuit filed in a Texas federal court more than two years ago, according to Morris H. Chapman, president and chief executive officer of the SBC Executive Committee.
Attorneys for the plaintiff, Boyd Richie, agreed to dismiss the SBC after meeting with Chapman Aug. 12 in Dallas. The court entered an order dismissing all claims against the SBC on Sept. 22.
“The face-to-face meeting with Mr. Richie and his attorneys gave us an opportunity to tell them personally what we had written in court documents filed since the beginning of this case,” Chapman said. “The SBC simply has not engaged in the type of transactions which are at issue in this suit. Mr. Richie and his attorneys listened to us and agreed. The SBC did not make any payment of any kind to the plaintiff in order to be dismissed from the suit.”
The suit, Richie vs. The American Council on Gift Annuities, Inc., became a class action in 1995 and asked for the rescission of countless charitable trusts, the return of all charitable gift annuities and that the charitable organizations be held liable for treble damages.
A charitable gift annuity is an arrangement in which a donor gives cash or other property to a charity in exchange for the charity’s promise to make regular payments to the donor during the donor’s lifetime. The actual amount of the annuity depends upon assumptions about future interest rates and the life expectancy of the donor. The charity receives the “gift,” the contribution made by the donor, at the donor’s death.
“We are very pleased to be out of this lawsuit,” Chapman said. “Courts sometimes have a hard time understanding the way Southern Baptists have chosen to cooperate with one another and to structure our relationships. The SBC is not controlled ‘from the top down,’ as are many religious denominations. The incorporated institutions of the SBC are governed by their respective boards of trustees elected by the messengers in annual session. Southern Baptists, although keenly interested in the ministries carried out by the SBC’s institutions, decided long ago to trust the day-to-day operations of each institution to its own board of trustees and officers.”
The Richie lawsuit began when a north Texas woman’s niece sued some organizations related to the Lutheran Church, Missouri Synod, because of charitable gift annuities, charitable trusts and testamentary gifts made by the donor and benefiting Lutheran Church organizations. Louise Peter’s niece claimed the annuities violated federal law because The American Council on Gift Annuities and some of its member organizations conspired to fix the rates of return on charitable gift annuities and the methods for calculating such returns in order to suppress fund-raising competition among charities. The suit was later expanded to add about 50 other defendants, including the American Bible Society, the Baptist Foundation of Texas and the SBC.
Dismissal of all claims against the SBC does not end the lawsuit. It will continue in the federal district court but without the involvement of the SBC.
Although the SBC became involved in the lawsuit in August 1995, many Southern Baptists became aware of the suit’s impact on the SBC during the 1997 annual meeting in Dallas in June. Messengers voted to request SBC entities to cooperate with the Executive Committee in responding to requests by the plaintiffs for documents and other information.
Gift annuities have been used in the United States for more than 150 years, first by the American Bible Society and since by churches, universities, hospitals and other charitable organizations like the Boy Scouts and Salvation Army.
Also present at the Aug. 12 meeting were James D. Jordan of the Nashville, Tenn., law firm of Guenther, Jordan & Rogers, general counsel for the SBC; James Harrison and Rob R. Roby of the Dallas law firm of Gwinn & Roby, local counsel for the SBC; and Lonnie Morrison, an attorney in Wichita Falls and one of the lawyers representing Boyd Richie.

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  • Herb Hollinger