From: whheydt@pbhya.PacBell.COM (Wilson Heydt)
Subject: Re: West Kingdom's Land Fund, Kingdom Trust, Inc.
Reply-To: whheydt@PacBell.COM (Wilson Heydt)
Organization: Pacific * Bell, San Ramon, CA
Distribution: usa
Date: Wed, 27 Jan 1993 00:51:46 GMT

In article <1993Jan26.175107.27795@progress.com> schuldy@progress.COM (Mark Schuldenfrei) writes:
>Jalut asked some good questions about KTI, and it's relationship to
>the SCA.  I'm no board member, (and may the universe protect me from
>such folly) but I'll add my conjecture to the mix.
>
>  What legal actions was the board or the West worried about? Was it
>  mostly insurance concerns? With a seperate incorporation, how can
>  Kingdom Trust take advantage of any non-profit rules that are used by
>  the SCA, Inc? Does an inter-corporation agreement exist that bind both
>  parties?

Not being on either Board, but being acquainted by floks on both...
The SCA Board is concerned about legal actions being taken against the
SCA because of the sorts of things that happen on land.  There is, for
instance, a creek.  I would imagine all the possibel 'attractive
nuisance' scenarios flashed through a few minds.  The KTI Board is
concerned that--in the case of a legal action against the SCA, Inc.,
the land would be seen as the only tangible asset worth going after.
If there were inter-corporation agreements, then the 'wall of
separation' between teh two corporations would be breached--or at
least, thinned considerably.

>If the SCA is required to pay a fine, by the court, the money to do
>so can come from two places.  From the insurance policy, if the policy
>covers that amount, and from funds held in SCA bank accounts.  If
>the funds are held by another corporation, those funds are separate.

Right.  But only to the extent that the other corporation is separate
and not a creature of the first one.

>By the same token, if KTI buys land and property, and some legal
>judgement comes out of that, it's insurance and funds would pay
>those liabilities.

Right again.  With the same argument.

>It seems remarkably clear to me that the international membership of
>the SCA should be fiscally separate from a piece of property that
>was funded purely by members of the West, and vice versa, and if
>I were a Board member, that's how I would treat it.  Of course, there
>is room for opinion on both sides.

There's certainly no *requirement* for such a separation on those
grounds.  The Land Fund moneys have been held for many years in such a
way that they could have been a target in a legal action as teh Land
Fund was part of the SCA, Inc.

>As for the second question, any Corporation which incorporates under
>California and Federal Law as a non-profit, get's the same rights and
>privileges as the SCA has.  I have no idea how KTI and SCA Inc, inter-
>relate.  I believe that the West Kingdom Land Fund was a separate
>trustee account, belonging to the SCA but administered by citizens
>of the West, and that Trustees had to be approved by a vote of the
>SCA Incorporated's Board of Trustees.  Once the funds belong to an
>independent Corporation, I doubt the SCA will have any responsibility
>whatsoever.

Correct.  Nor any liability.

>As to whether there will be an interlocking directorate, I have no idea.

There isn't now and I know of no plans for there to be one.  In any
case, such an arrangement would defeat much of the purpose of separate
incorporation.

>I'm of two minds as to whether it would be a good thing or not.  I
>suspect not, but I'd love to hear arguments both ways.

The argument against is above.  The argument for is to keep
'outsiders' from taking over the Land Fund board and removing SCA
members access and control of over it.

>  When acquiring land, how will KTI represent itself to state and local
>  government, especially with regards to property tax liabilities?

Beats me.  It's another non-profit.  Since the land is to be purchased
for the specific use as an SCA site, that's within the stated purpose
of the money.

>  KTI probably has either a board or a president and trustee group. Is
>  there any cross pollenization between KTI and SCA, Inc, i.e. one
>  director on both corporations' "boards?"
>
>See my previous comments on interlocking directorates.

And mine.  There is no present crossover.

>  This seems like it could go either way as problems occur. With the
>  Barony of Caerthe active in their Land fund work, the experiment in the
>  West is of importance and knowing the reasons for the direction taken
>  could be of great benefit.

A Barony seems a bit on the small side to start such an effort....

>  The biggest question, thus, is why the West and the Board chose this
>  direction? 

Aside from the liability issues, the Land Fund needs to move faster
than quarterly board meetings seem to permit the SCA to move.

>You've gotta ask them exactly why.  I think the behavior is obvious.
>If the "s" hits the "f" for the West Kingdom, this way it won't shut
>down the SCA.  Additionally, if it is purely a West Kingdom matter,
>why should the national membership have any say in it?
>
>I do admit, I hope that the Articles of Incorporation for KTI allow
>for the return of all assets to the control of the SCA if KTI fails
>for some reason.  But I'm not sure why I want this.

Since a non-profit can only give assets to another non-profit....  The
resources have to stay in that loop.

>The SCA ought to get some expertise in handling assets and property
>PDQ.  As the organization get's older, the SCA could easily be named
>in Wills and Bequests as a benficiary, and right now we have no
>capability to handle property and assets that are of significant
>value.  For that matter, like most non-profits, we could be soliciting
>members to leave money in their wills to the SCA: we aren't doing that
>either so far as I know.

Interesting point.  I suspect that any real assets willed to the SCA
would either be placed in trust with an outside agency or liquidated
and the funds invested.

	--Hal

        Hal Ravn, West Kingdom
        Wilson H. Heydt, Jr.,  Albany, CA 94706,  510/524-8321 (home)

Nothing in this missive constitutes an act or opinion of the Lord High
Constable of the Kingdom of the West unless otherwise explicitly stated.
-- 
Hal Heydt                    |    
Analyst, Pacific*Bell        |            You!
510-823-5447                 |    Out of the Gene Pool!
whheydt@pbhya.PacBell.COM    |