Sole Beneficiary Motion

What was Princeton’s “Sole Beneficiary” motion? How did the court rule?


What was Princeton’s “Sole Beneficiary” motion? How did the court rule?

In their complaint against Princeton, plaintiffs asked the court to amend the Foundation’s Certificate of Incorporation and Bylaws to remove the University from any control or involvement with the Foundation and to remove the University from its position of being the sole charitable organization that can be supported by the Foundation. [See: What are plaintiffs seeking in this litigation?]

Princeton asked the court to rule that this effort by Mrs. Robertson’s descendants to sever the relationship between the University and the Foundation is contrary to the unambiguous terms of the Foundation’s governing documents and contrary to applicable law. [See: Did the donor intend to give Princeton control over the Robertson Foundation?]

Judge Shuster found that “Article 3 of the Foundation’s Certificate of Incorporation is clear and unambiguous as to the University being the sole institution to which Foundation funds are to be directed.” He denied the motion for summary judgment, however, holding that as a court of equity, he should not “foreclose an equitable remedy prior to having the full facts,” i.e., until after a trial. The court cautioned that the relief sought by the plaintiffs is “only... appropriate to remedy the most egregious and nefarious of circumstances” and noted that “before this Court ordains a particular type of relief, it should have the full facts before it.”

Addressing plaintiffs’ argument that the equitable doctrines of cy pres and deviation should apply to permit a redirection of the assets of the Foundation, the court again declined to rule at this time, but expressed reservations about whether the doctrines could be applied to the Robertson Foundation as a matter of law. Judge Shuster also expressed reservations about whether the Robertsons could prevail on these doctrines even if they could be applied here, declaring that the court “is not satisfied, at this stage in the litigation, that there has been a sufficient showing of a legal or practical impediment to the accomplishment of the Foundation’s mission as set forth in the Foundation’s Certificate of Incorporation.”