PRESENT: All the Justices 

LASZLO N. TAUBER, ET AL. 

v. Record No. 011150 OPINION BY JUSTICE BARBARA MILANO KEENAN 

 April 19, 2002 

COMMONWEALTH OF VIRGINIA, EX REL. 

JERRY W. KILGORE, ATTORNEY GENERAL 

OF VIRGINIA, ET AL. 

FROM THE CIRCUIT COURT OF THE CITY OF ALEXANDRIA 

Alfred D. Swersky, Judge 

 In this appeal, we consider issues related to an accounting 

of the assets of a defunct charitable corporation. The 

chancellor awarded $20 million and certain real property to the 

Commonwealth for the public benefit after imposing a 

constructive trust on the assets of the corporation whose 

charter was revoked in 1973. 

We initially considered issues arising from the diversion 

of assets of Jefferson Memorial Hospital, Inc. (JMHI) in Tauber 

v. Commonwealth, 255 Va. 445, 499 S.E.2d 839 (1998) (Tauber I). 

There, we affirmed the chancellor's judgment imposing a 

constructive trust on the assets of the defunct charitable 

corporation and we remanded the case to the chancellor for 

further proceedings. Id. at 450-51, 456, 499 S.E.2d at 842, 

845. We will recite the relevant facts in the proceedings to 

date, including the inferences fairly deducible from those 

facts, in the light most favorable to the Commonwealth, the 

prevailing party below. Id. at 452, 499 S.E.2d at 843; Hoffman 
Family, L.L.C. v. Mill Two Assocs. P'ship, 259 Va. 685, 696, 529 

S.E.2d 318, 325 (2000). 

Our standard of review on appeal is well established. As 

the trier of fact, the chancellor evaluated the testimony and 

the credibility of the witnesses. Johnson v. Cauley, 262 Va. 

40, 44, 546 S.E.2d 681, 684 (2001); Advanced Marine Enters., 

Inc. v. PRC Inc., 256 Va. 106, 120, 501 S.E.2d 148, 156 (1998). 

Therefore, we will not set aside his findings on appeal unless 

they are plainly wrong or without evidence to support them. 

Nelson v. Davis, 262 Va. 230, 234, 546 S.E.2d 712, 715 (2001); 

Hudson v. Pillow, 261 Va. 296, 302, 541 S.E.2d 556, 560 (2001). 

I. BACKGROUND FROM TAUBER I

 In the early 1960s, King Street Joint Venture (KSJV), 

through Laszlo N. Tauber, M.D., as trustee, acquired by deed and 

lease certain parcels of real estate located in the City of 

Alexandria. In 1963, JMHI obtained a charter in the state of 

Maryland as a "for-profit" corporation for the purpose of 

operating a hospital in Alexandria to be built on the acquired 

parcels of real estate. In 1964, JMHI amended its corporate 

charter to become a non-profit corporation and began operating 

the new hospital the following year. In 1966, KSJV was 

dissolved and its assets were transferred to Jefferson Memorial 

Hospital Associates (JMHA), a partnership conducted by Tauber as 

trustee. 

2
 In 1971, Jefferson Memorial Hospital Corporation (JMHC), a 

Delaware "for-profit" corporation, was formed and acquired the 

assets and liabilities of JMHA. Soon thereafter, a purported 

merger was attempted between JMHC and JMHI. As we observed in 

Tauber I, while "[t]his merger was reported on tax returns filed 

in 1972, . . . the record is devoid of documents to support such 

a transaction." Id. at 453, 499 S.E.2d at 843. 

 Also in 1972, the Internal Revenue Service issued a ruling 

revoking JMHI's tax-exempt status, retroactive to 1965, finding 

that JMHI engaged in transactions that resulted in "inurement of 

income to private individuals," in violation of Internal Revenue 

Code provisions allowing charitable corporations exemption from 

federal income taxation. In 1973, Maryland revoked JMHI's 

corporate charter. 

 In 1975, JMHC purportedly purchased the assets and assumed 

the liabilities of JMHI. The directors of JMHC thereafter 

authorized the transfer of all JMHC's assets to Tauber as 

trustee for Jefferson Memorial Hospital Joint Venture (JMHJV), 

"a partnership in which those assets apparently still reside." 

Id. at 449, 499 S.E.2d at 841. That same year, JMHJV "leased 

back" the transferred assets to JMHC. 

 In 1982, JMHC subleased Jefferson Memorial Hospital's 

operating license, liabilities, plant, equipment, and tangible 

and intangible assets to Health Group of Virginia, Inc. (HGV), a 

3
Tennessee corporation, for ten years in exchange for annual 

payments of about $1 million. A maximum of $240,000 of this 

amount was allocated toward payment of lease obligations owed to 

JMHJV, including payment of the $1.4 million mortgage that JMHJV 

had assumed from JMHI as part of the 1975 purported sale and 

"leaseback" transaction. 

 JMHJV amended its lease with JMHC to provide that JMHC 

would assign the proceeds from its sublease with HGV to JMHJV, 

except for the first $100,000 annually, in effect increasing 

JMHC's rental payments from $240,000 to $900,000 per year. 

Following the execution of this lease amendment, JMHJV built a 

new office building and garage complex (the Beauregard 

Building). JMHC later changed its name to Jefferson Corporation 

of Alexandria (JCA). 

 In 1985, Tauber alleged that HGV had breached the terms of 

its lease and negotiated a termination and buy-out of the 1982 

agreement by Fairfax Hospital Systems (INOVA). INOVA acquired 

HGV's stock for $5.8 million. In a lease agreement with JCA, in 

exchange for the operating license rights of the hospital, INOVA 

agreed to pay annual rent of about $1,375,000 under provisions 

that escalated to about $2.2 million in the year 2005. On the 

same date the INOVA lease was executed, JCA assigned "all of its 

right, title and interest" in the INOVA lease to Tauber as 

trustee for JMHJV. 

4
 In 1992, INOVA discovered problems in the chain of title to 

the hospital, which ultimately resulted in litigation between 

INOVA and JMHJV. In 1994, INOVA and JMHJV reached a settlement 

agreement (the 1994 INOVA Agreement), in which INOVA purchased 

all rights to operate the hospital, including the right to 

terminate hospital operations. Under the 1994 INOVA Agreement, 

possession of the land and hospital building reverted to JMHJV. 

In exchange for the operating license rights of the hospital, 

INOVA agreed to pay JMHJV over $2 million per year, with a final 

payment of $10 million in 2005. 

 In 1996, the Commonwealth of Virginia, ex rel. the Attorney 

General of Virginia and the Commonwealth's Attorney for the City 

of Alexandria (collectively, the Commonwealth), filed an amended 

bill of complaint against Tauber and nine other physicians. 

Each was sued "individually and as former directors and/or 

trustees and/or trustees in liquidation of [JMHI] . . . and/or 

its successors in interest, and/or as partners in [JMHA] . . . 

or [JMHJV], . . . and/or directors or shareholders of [JMHC] (a 

Delaware Corporation which changed its name to 'Jefferson 

Corporation of Alexandria')" (collectively, the defendants). 

The defendants also included JMHA, JMHJV, and JCA, as well as 

Tauber in his capacity as trustee and agent for JMHA and JMHJV. 

 In its amended bill of complaint, the Commonwealth alleged 

that the 1971 purported merger between JMHI and JMHC never 

5
occurred. The Commonwealth asked that the chancellor declare, 

among other things, that the defendants usurped JMHI's corporate 

opportunities and, thus, that legal title to JMHI's assets 

remained in JMHI. The Commonwealth also requested that the 

chancellor impose a constructive trust on the hospital building, 

the underlying land, equipment, and assets, and on the proceeds 

from the 1994 INOVA Agreement.

 The chancellor held that the Commonwealth was entitled to 

the relief sought in its bill of complaint. In a March 1997 

order, the chancellor declared that "the assets and liabilities 

of [JMHI] be, reside and remain with [the defendants] as 

trustees and further that a constructive trust be . . . imposed 

on such assets and liabilities." The chancellor also ordered 

the defendants to submit "a full and complete accounting of all 

assets and liabilities" that were subject to the chancellor's 

ruling. 

 In Tauber I, we affirmed the chancellor's judgment. Id. at 

456, 499 S.E.2d at 845. We stated, in relevant part: 

 The record amply supports the following findings 

of the chancellor. "There are numerous transactions 

shown, some of-record and some not, dealing with the 

real estate, the equipment, the leases, and the use of 

tax benefits. The transactions show an entire course 

of self-dealing by the directors of the charity. They 

were able to acquire interests in the real estate, the 

equipment and lease, and were able to use tax benefits 

belonging to the former charity to enhance the gain of 

the for-profit corporation. The record is replete 

with discussions among [defendants] as to their 

6
personal profits and gains with no reference to the 

best interests of the beneficiaries nor of the 

charitable corporation. The result was the total 

obliteration of the non-profit corporation." 

Id. at 453-54, 499 S.E.2d at 843-44. We held that after the 

1973 revocation of JMHI's corporate charter, by operation of 

law, JMHI's directors became trustees in dissolution of the 

charity. Id. at 455, 499 S.E.2d at 844. We stated that any 

actions thereafter taken by the defendants "as corporate 

officers, and not done to wind up or liquidate the business, 

were without effect because there was no corporation for which 

to act." Id., 499 S.E.2d at 844-45. We also concluded that the 

record clearly demonstrated that the defendants "failed and 

refused to execute the trust," and we remanded the case to the 

chancellor for further proceedings. Id. at 456, 499 S.E.2d at 

845. 

II. EVIDENCE ON REMAND 

 On remand, the chancellor considered evidence concerning 

the value of JMHI's assets that were subject to the constructive 

trust. The record included the testimony of Celeste B. Vella, 

an attorney who testified in the original proceedings before the 

chancellor and qualified as an expert witness in the field of 

real estate transactions and title issues. Vella testified that 

JMHI owned the beneficial interest in several parcels of realty, 

including a portion of land that overlaps "Hopkins Parcel 1" and 

7
"Hopkins Parcel 2," a 65% undivided interest in the totality of 

Hopkins Parcels 1 and 2, and the "Berman Parcel." 

Vella stated that she used the term "improvements" to refer 

to the buildings erected on the various properties, and that a 

majority of the hospital improvements were constructed on 

Hopkins Parcels 1 and 2. Vella observed that JMHA's financial 

statement and tax return for 1971 indicated that JMHA 

transferred ownership of the hospital improvements to JMHI on 

June 30, 1971. She also stated that JMHC's financial statement 

for 1971 indicated that JMHC acquired JMHA on July 1, 1971, one 

day after the improvements were transferred to JMHI. Vella 

testified that in her opinion, title to both the land and the 

improvements JMHI owned in 1971 still remained in JMHI at the 

time of trial. 

Vella also concluded that JMHI owned the beneficial 

interest in all the structures, including the hospital building, 

which were located on Hopkins Parcels 1 and 2 and the Berman 

Parcel. She stated that her opinion was based on an examination 

of record deeds, "off-record" deeds, leases, purchase 

agreements, corporate documents, federal tax returns, financial 

statements, letters, and the defendants' answers to 

interrogatories filed in the case. 

 Vella noted that, in 1975, JMHI purportedly conveyed its 

interest in a smaller portion of the above properties to JMHC, 

8
which in turn purportedly conveyed that portion to Tauber as 

trustee. However, Vella concluded that this transaction was 

void because JMHI no longer existed as a corporation after its 

1973 charter revocation and "the appropriate parties were not 

joined in the deed in order to effect conveyance." In 

explaining her conclusion, Vella stated that "in order for the 

directors to act pursuant to a forfeited corporate charter, they 

would have to make this decision as trustees. And it appears 

from the minutes that they were acting as if JMHI still 

existed." 

 The Commonwealth also presented the testimony of Robert E. 

Wilson, a certified public accountant employed by Arthur 

Andersen LLP. Wilson stated that he conducted a fiduciary 

accounting of JMHI's assets based on the requirements specified 

in the chancellor's March 1997 decree, which directed disclosure 

of "all rents, issues, profits, accretions, and benefits, 

tangible and intangible, which have accrued therefrom." Wilson 

also explained that in conducting the accounting, he used a 

"conservative" approach that resolved any doubt in favor of the 

defendants. 

Wilson testified that the right to operate the hospital and 

to generate income, which was secured by the hospital's 

operating license, was an asset subject to the constructive 

trust because JMHI never surrendered ownership of that license. 

9
He explained that "[t]he operating license is the engine . . . 

that runs this hospital. The bricks and mortar are simply the 

chassis. The value is in the license." 

 Wilson concluded that "[t]he reorganizations of the 

Hospital's operating entity appeared to be done with the primary 

intent of creating financial gain for the original investor 

group." He stated that the defendants' actions "stripped" JMHI 

of much of its value and severely undercapitalized the operation 

of the hospital. He explained that these actions required the 

charity "to absorb the burden of being a tenant . . . at a cost 

. . . in excess of what it would have been" had the charity 

owned and operated its own infrastructure, which purportedly had 

been transferred to the defendants' other "for-profit" 

enterprises. 

Wilson stated that the defendants made only a single 

capital contribution to the charity, and that there were "many 

instances" in which they had received a return on their original 

investment "many times over." He also determined that the 

defendants commingled their personal funds with the assets of 

the charity, and that the activities of JMHJV "served to impair 

the fiscal stability of JMHI." 

 Wilson calculated the income generated from the assets held 

in trust by the defendants as trustees in dissolution, including 

the proceeds from the HGV and INOVA transactions and the 1994 

10
INOVA Agreement. Wilson's calculations showed that as of June 

30, 1999, JMHI had realized assets in the amount of $26,372,438 

that were subject to the constructive trust. Wilson further 

determined that an additional $24,703,145 would accrue to the 

benefit of the constructive trust from July 1, 1999 through 

October 1, 2005, when INOVA is required to make final payment 

under the terms of the 1994 INOVA Agreement. 

 Wilson also addressed the methodology used by the 

defendants in the accounting they submitted to the chancellor. 

He testified that the defendants' submission was not a fiduciary 

accounting because it did not reflect what actually had 

transpired with regard to JMHI's assets. Wilson stated that he 

did not see evidence of "any recognition given to the accretion 

of any of the charity's assets at any point in time," and that 

the defendants did not account for the net operating losses of 

the charity. He described the defendants' methodology as the 

act of choosing four dates and attempting "to create a value 

judgment or estimation of value based upon the creation of 

balance sheets which have one foot in reality and one foot in 

hypothesis." 

 Wilson explained that valuation is relevant only "if you 

are winding up and liquidating a business, disposing of assets 

and liabilities." He stated that because JMHI was never "wound11
up" or liquidated, "any valuation information at any point in 

time is nothing more than a reflection of what might be." 

 The defendants' accounting, prepared by Arthur H. Cobb, 

reported JMHI's assets only through 1973, when JMHI's corporate 

charter was revoked. Cobb also prepared value calculations that 

were based on certain assumptions, including the assumption that 

JMHI was liquidated in the alternative years of 1975, 1982, 

1992, and 2005. 

 Cobb testified that JMHI was "undercapitalized" and had 

received only "one formal capital contribution," which was 

repaid within two years. He also stated that the hospital was 

merely a "white elephant" if its assets were considered apart 

from its operating license. 

 Cobb's accounting indicated that a liquidation of JMHI in 

April 1973 would not have yielded any net proceeds, because 

total liabilities would have exceeded total assets. Cobb 

reached a similar conclusion for the hypothetical liquidation of 

JMHI on July 1, 1975, the date of the sale and "leaseback" 

transaction with JMHJV. He also estimated that a hypothetical 

liquidation of JMHI in 1982, at the time of the HGV transaction, 

would have resulted in about $1,254,000 in net proceeds. 

 Cobb prepared calculations involving a hypothetical 

liquidation year of 1992, "based on JMHI participating in 

leasing or sub-leasing certain land, building and related 

12
equipment, furniture and fixtures" to HGV and to INOVA. Under 

this assumption, Cobb estimated that liquidation of JMHI's 

business at the end of 1992 would have resulted in about 

$5,462,000 in net proceeds. 

 Using a hypothetical liquidation year of 2005, Cobb 

estimated the value of JMHI's assets including, among other 

things, payments that JMHI would receive from INOVA pursuant to 

the 1994 INOVA Agreement. Cobb estimated that a liquidation of 

JMHI's business in September 2005 would result in net proceeds 

of about $21,944,511. He estimated that the "present value" of 

this amount in December 1999 was between $4,646,000 and 

$10,347,000, depending on various annual rates of return. 

However, Cobb did not include in his calculations the $10 

million payment due from INOVA on October 1, 2005. 

 Tauber testified concerning the buildings and building 

additions built by the partnerships KSJV, JMHA, and JMHJV. His 

testimony primarily addressed the cost, rather than the source 

of the funds used, for the improvements constructed. He stated 

that construction of the original hospital building was 

completed in 1965 at a cost of $1,055,000, and that a "nursing 

wing" was built in 1968 at a cost of about $110,000. 

Tauber testified that a foyer, corridor, and physical 

therapy unit were added to the hospital in 1974 at a cost of 

about $96,000, and that an intensive care unit was added in the 

13
late 1970's at an approximate cost of $92,000. He also stated 

that in 1979, a six-story office building was built on King 

Street (the Medical Office Building) at a cost of about 

$2,650,000. 

Tauber testified that "the physicians" paid $1,600,000 of 

the construction costs of the Medical Office Building, but he 

did not identify more specifically who actually made these 

contributions. He indicated that the remaining costs of that 

building were financed from the $1,400,000 "new mortgage" that 

was assumed by JMHC in 1978. He also testified that another 

office building was constructed in 1982 on North Beauregard 

Street (the Beauregard Building) at an approximate cost of 

$722,000. 

 Tauber stated that as part of an effort to attract doctors 

to the Beauregard Building, JMHJV leased two-thirds of the 

building's office space to Irwin S. Freedman, one of the 

defendants, and his medical practice group. Freedman's lease 

was for a term of ten years and provided that at its 

termination, Freedman could purchase the portion of the building 

he occupied for $1, conditioned on his group practice having 

admitted at least 90% of its patients to the hospital. Eight 

and one-half years into the lease term, Freedman was permitted 

to purchase this two-thirds ownership share of the Beauregard 

Building for $1. 

14
 Tauber further testified that in 1983 a fourth-floor 

addition was built over the nursing wing of the hospital at a 

cost of approximately $927,000. Finally, he agreed that the 

hospital building would be a mere "white elephant" without the 

license to operate the hospital because the building was "a 

single-purpose building." 

III. CHANCELLOR'S DECISION 

 In a letter opinion dated July 13, 2000, the chancellor 

rejected the defendants' accounting. He observed that the 

methodology used by the defendants did not afford "an 

opportunity to calculate the receipts, disbursements, rents, and 

profits that actually accrued to [the defendants]." The 

chancellor also found, in relevant part: 

 [The defendants] obtained interests in real 

property, were paid "dividends" in excess of their 

capital contributions, and finally obtained a 

settlement of a dispute with Inova directly arising 

out of hospital operations. 

 Under accepted principles, [the defendants] 

cannot profit from the wrong doing found by the Court 

and must be called to account for the profit obtained. 

In addition, where [the defendants], trustees in 

dissolution, commingle their interests with those of 

the charity, they bear the burden of proving the 

separate nature of the assets. [The defendants] have 

not met that burden. Hence, they are accountable for 

all of the assets, rents, profits, and receipts they 

obtained. 

 The chancellor determined that JMHI's interest in the real 

property and improvements included a 70% interest in Hopkins 

15
Parcels 1 and 2, a 100% interest in the Berman parcel, which he 

referred to as "Beauregard Street," and a 100% interest in the 

hospital improvements and the Beauregard Building. He concluded 

that the Commonwealth's accounting established that the 

defendants received net revenue through June 30, 1999 in the 

amount of $26,372,438. The chancellor also determined from the 

Commonwealth's accounting that the anticipated revenue from the 

1994 INOVA Agreement through October 1, 2005, including the $10 

million payment, was $24,703,145. These figures resulted in 

total net and future revenue in the amount of $51,075,583. 

 The chancellor's ruling further provided, in relevant part: 

 Under strict accounting rules, [the defendants] 

would be liable for the accrued revenues plus the 

present value of the future payments due from Inova. 

However, equitable principles require that a fairness 

test be applied to any award in this case. 

 Since [the defendants] now hold valuable real 

estates as trustees in dissolution, and since the 

benefit to other charities will be substantial even if 

[the defendants] are not required to account dollarfor-dollar, and the purposes of this cause will be 

served, this Court finds that an award of Twenty 

Million Dollars ($20,000,000.00) in addition to the 

real property is fair and just under all of the 

circumstances. 

The chancellor also stated that he would consider further 

argument whether the defendants were entitled to a credit for 

"costs of acquisition and improvements to the realty actually 

incurred." 

16
 On November 13, 2000, a hearing was held in which the 

defendants presented evidence that Leslie P. Gondor, M.D., one 

of the defendants, paid $150,000 in 1964 to purchase an interest 

in certain real property from JMHI. Gondor made this purported 

purchase in his own name by means of an "off-record" letter 

transaction. At the same hearing, the defendants argued, among 

other things, that they should be given a credit for the 

construction costs of the hospital building, the Medical Office 

Building, and the Beauregard Building. 

 In a letter opinion dated December 27, 2000, the chancellor 

denied the defendants' motion for acquisition and construction 

credits and their motion to release portions of the award to 

certain charities controlled by Tauber. The chancellor also 

denied the Commonwealth's motion for an award of attorneys' fees 

and costs. 

 On February 21, 2001, the chancellor entered a decree 

incorporating his previous letter opinions and awarding judgment 

in favor of the Commonwealth as trustee against the defendants 

"individually and as former directors and/or trustees and/or 

trustees in liquidation," and against JMHA, JMHJV, JCA, and 

Tauber as trustee and agent for JMHA and JMHJV. The chancellor 

further decreed "that all of the assets referenced and described 

herein are subject to [the] constructive trust," including the 

anticipated revenue from the 1994 INOVA Agreement. 

17
 The chancellor's decree directed that the assets subject to 

the constructive trust be distributed according to the doctrine 

of cy pres. In his decree, the chancellor also provided for 

interest on his award at the statutory rate of nine percent from 

July 13, 2000, the date the chancellor issued his opinion letter 

deciding the case in favor of the Commonwealth. 

 The chancellor later held a hearing to set the amount of an 

appeal bond. He ruled that under Code § 8.01-676.1(C), he was 

obligated to "require the posting of an appeal bond . . . with 

surety or an irrevocable letter of credit in an amount 

sufficient to pay [the] judgment." 

 The defendants appealed from the chancellor's holdings. 

The Commonwealth assigned cross-error to the amount of the 

judgment and the chancellor's refusal to award the Commonwealth 

its attorneys' fees and accounting costs. 

IV. ISSUES RESOLVED BY TAUBER I

 The defendants raise several arguments that we resolved in 

Tauber I or are necessarily decided by our holdings in that 

appeal. We will set forth these issues below. 

Void Transactions and "Fairness"

 The defendants argue that the chancellor erred in failing 

to hold that the purported sale in 1975 of JMHI's assets to 

JMHC, or in the alternative, the 1982 transactions with HGV, 

constituted acts of trustees in dissolution of JMHI to "wind-up" 

18
the non-profit corporation. The defendants also assert that the 

chancellor erred when he held that the purported sale in 1975 of 

JMHI's assets to JMHC was void, regardless of the fairness of 

the sale from the perspective of JMHI. We disagree with the 

defendants' arguments. 

 In Tauber I, we concluded that the law and the evidence 

fully supported the chancellor's rulings that JMHI and JMHC did 

not "merge" in 1971. Id. at 455, 499 S.E.2d at 844. We also 

held that the transactions purportedly taken by the directors 

after the 1973 charter revocation were void. We stated: 

Because the 1971 "transaction" never occurred, the 

1973 revocation of JMHI's corporate charter converted 

its directors by operation of law to trustees in 

dissolution . . . . 

The charter revocation terminated JMHI's corporate 

existence and powers, and it could no longer function 

as a corporation. . . . From that day forward, the 

defendants' actions purportedly taken as corporate 

officers, and not done to wind up or liquidate the 

business, were without effect because there was no 

corporation for which to act. The corporate assets 

had automatically transferred to the directors as 

trustees. 

Id., 499 S.E.2d at 844-45. 

 In addition, as stated above, we concluded that the "record 

clearly demonstrates that the directors of JMHI, now trustees in 

dissolution, have failed and refused to execute the trust." Id.

at 456, 499 S.E.2d at 845. We held that the transactions at 

issue showed "an entire course of self-dealing by the directors 

19
of the charity" that resulted in "the total obliteration of the 

non-profit corporation [JMHI]." Id. at 453-54, 499 S.E.2d at 

844. 

These holdings in Tauber I mandate our present conclusion 

that the purported sale in 1975 of JMHI's assets to JMHC, and 

the 1982 transactions with HGV, did not constitute acts of the 

defendants as trustees in dissolution to "wind-up" the corporate 

affairs of JMHI. This conclusion is amply supported by the 

record, which contains no indication that the transactions in 

1975 and 1982 were entered into by the defendants as trustees in 

dissolution of JMHI, on behalf of the charity, rather than as 

directors of JMHC who profited from the transactions. 

 In Tauber I, we also rejected the defendants' contention 

that we should apply a "fairness" test to the 1971 failed 

"merger" between JMHI and JMHC. Id. at 455-56, 499 S.E.2d at 

845. Our conclusion was based on our holding that the 

defendants were not entitled under any circumstances to property 

rights or other assets belonging to JMHI, either during or after 

the life span of the corporation. We stated that "[t]o hold 

otherwise would convert the public nature and purpose of the 

corporation into a vehicle for the personal pecuniary gain of 

the members." Id. at 455, 499 S.E.2d at 845 (quoting Hanshaw v. 

Day, 202 Va. 818, 824, 120 S.E.2d 460, 464 (1961)). This 

conclusion applies equally to the purported sale in 1975. 

20
Moreover, a defense of "fairness" is inapplicable to the review 

of a void transaction such as the 1975 purported sale, because 

that transaction in effect never occurred. 

Assets in Dissolution of JMHI

 The defendants argue that the chancellor erred in 

classifying the rents, profits, and other sums accruing to 

entities controlled by the defendants, including revenues from 

the leases with HGV and INOVA and proceeds from the 1994 INOVA 

Agreement, as assets in dissolution of JMHI subject to the 

constructive trust. However, as stated above, we concluded in 

Tauber I that after JMHI's charter revocation, its corporate 

assets were automatically transferred to the directors as 

trustees in dissolution of the charity. Id. at 455, 499 S.E.2d 

at 844-45. The evidence before the chancellor in the first 

proceeding, and Wilson's accounting testimony in the proceeding 

on remand, identified the leases with HGV and INOVA, and the 

proceeds of the 1994 INOVA Agreement, as assets of JMHI that 

were diverted by the defendants for their personal benefit to 

JMHJV. 

 We also find no merit in the defendants' argument that the 

chancellor erred in including in the constructive trust a parcel 

of land that JMHI purportedly had transferred to Gondor in the 

1964 "off-record" transaction. The chancellor's holding is 

supported by Vella's testimony in the initial proceeding that 

21
JMHI presently is the beneficial owner of certain real property 

that includes the interest allegedly transferred to Gondor. 

Therefore, we conclude that the chancellor properly placed the 

above assets and property in the constructive trust. 

"Sale" of Beauregard Building

 The defendants contend that the chancellor erred when he 

held that the Beauregard Building was an asset in dissolution of 

JMHI. They contend that this building was sold to Freedman, one 

of JMHI's trustees in dissolution, and other bona fide 

purchasers for value who lacked notice of "any adverse claim" 

regarding the property. The defendants further contend that the 

imposition of a constructive trust on this property violated the 

Due Process Clause of the United States Constitution. We 

disagree with the defendants' arguments. 

 In Tauber I, we held that the trustees in dissolution of 

JMHI were not entitled to any of the charity's assets after the 

dissolution of the charity. Id. at 455, 499 S.E.2d at 845. 

However, Freedman purportedly purchased his two-thirds interest 

in the Beauregard Building for $1 in 1992, during his tenure as 

a trustee in dissolution of JMHI. He entered into this 

purported transaction about 19 years after JMHI's charter 

revocation. 

A purchaser of real property is bound by both constructive 

and actual notice and "has no right to shut his eyes or his ears 

22
to the inlet of information, and then say he is a bona fide 

purchaser [for value] without notice." Richmond v. Hall, 251 

Va. 151, 157, 466 S.E.2d 103, 106 (1996) (quoting Burwell v. 

Fauber, 62 Va. (21 Gratt.) 446, 463 (1871)). Thus, we conclude 

that Freedman was not a bona fide purchaser for value without 

notice because at the time of his alleged purchase, he had 

actual notice that the charity had been dissolved and 

constructive notice that the Beauregard Building was one of the 

charity's assets.1 

"Safe Harbor" Defenses

 The defendants assert that the chancellor "failed to apply 

the law in effect at the time [he] rendered [his] decision," and 

that his "failure to apply Maryland law violated the Full Faith 

and Credit, Due Process, and Commerce Clauses of the United 

States Constitution." In support of these arguments, the 

defendants note that Maryland law provides a "safe harbor" for 

corporate directors who act in good faith in discharging their 

corporate duties.2 The defendants also argue that the chancellor 

should have conducted a hearing concerning whether they took 

their actions as corporate officers in good faith. 

 1

 We do not address the status of the other purported 

purchasers of the Beauregard Building because they are not 

parties to this suit. 

2 See Md. Code Ann., Corps. & Ass'ns § 2-405.1 (2001).

23
 These arguments are completely precluded by our holding in 

Tauber I that the defendants were trustees in dissolution of 

JMHI, rather than corporate directors, following JMHI's charter 

revocation in 1973. Id. at 455, 499 S.E.2d at 844. Therefore, 

any defenses of good faith in the exercise of business judgment 

that may be asserted by corporate directors of a non-profit 

corporation are inapposite here. See Code § 13.1-870; Lake 

Monticello Owners' Ass'n v. Lake, 250 Va. 565, 571, 463 S.E.2d 

652, 656 (1995). See also Md. Code Ann., Corps. & Ass'ns § 2-

405.1 (2001); Werbowsky v. Collomb, 766 A.2d 123, 138 (Md. 

2001).

Doctrine of Cy Pres

 The defendants assign error to the chancellor's decision to 

apply the Virginia law of cy pres rather than Maryland law 

governing the distribution of assets of a Maryland non-profit 

corporation. The common law doctrine of cy pres permits a court 

of equity to administer a charitable trust to conform as closely 

as possible to the purpose for which the trust was created or, 

if that purpose cannot be achieved, for some other charitable 

purpose.3 See Baliles v. Miller, 231 Va. 48, 56 n.7, 340 S.E.2d 

805, 810 n.7 (1986); Campbell v. Board of Trustees, 220 Va. 516, 

524, 260 S.E.2d 204, 209 (1979). 

24
 In Tauber I, we held that the chancellor properly imposed a 

constructive trust so that the assets of JMHI can be distributed 

in accordance with appropriate charitable purposes. We stated 

that 

the [chancellor] properly exercised [his] authority to 

insure that these assets, now held by the defendants 

as trustees in liquidation, are distributed in accord 

with the charitable purposes to which they should have 

been devoted. This power to liquidate the assets and 

business of a nonstock corporation may be exercised 

over the property within the court's jurisdiction "of 

a foreign corporation that has ceased to exist." Code 

§ 13.1-909(B). 

Id. at 456, 499 S.E.2d at 845. Based on this holding in Tauber 

I, we conclude that the chancellor properly invoked the doctrine 

of cy pres in providing for the future distribution of JMHI's 

assets. 

Individual Liability

 The defendants argue that the chancellor erred in holding 

them individually liable for the amount of the assets diverted 

from the charity. The defendants also assert that they were 

entitled to notice and a hearing on the issue of individual 

liability under Virginia Code § 13.1-870, Md. Code Ann., Corps. 

& Ass'ns § 2-405 (2001), and the Due Process Clause of the 

United States Constitution. 

 3

 We note that Code § 55-31, the "cy pres" statute, is 

inapplicable here because its provisions are confined to express 

trusts. 

25
 These arguments, however, are precluded by our decision in 

Tauber I. In the amended bill of complaint in the original 

proceedings, the Commonwealth asserted, among other things, that 

the defendants were liable for the acts complained of "each 

individually and as a former director of [JMHI] . . . and/or as 

partners in Jefferson Memorial Hospital Associates, or [JMHJV], 

and/or directors or shareholders of [JMHC] (a Delaware 

Corporation now known as 'Jefferson Corporation of 

Alexandria')." Id. at 449, 499 S.E.2d at 841. 

The chancellor held that the Commonwealth was entitled to 

the relief requested in its amended bill of complaint, and we 

upheld the chancellor's determination, without exception. Id.

at 450, 456, 499 S.E.2d at 842, 845. This disposition in Tauber 

I resolved the issue of the defendants' individual liability, 

and their liability for their actions on behalf of JMHI, JMHC, 

JCA, JMHA, and JMHJV. 

V. ISSUES NOT RESOLVED BY TAUBER I

 We turn now to consider the defendants' assignments of 

error that are not precluded by our decision in Tauber I. After 

that discussion, we will examine the Commonwealth's assignments 

of cross-error. 

Burden of Proof on Remand

 The defendants argue that the Commonwealth had the burden 

of tracing JMHI's assets into an identifiable account or 

26
property. They assert that as a claimant seeking recovery of 

assets that may have been commingled with other assets, the 

Commonwealth must identify the portion of the commingled 

property to which it is entitled. In response, the Commonwealth 

contends that when trustees have commingled personal assets with 

those belonging to the trust, the entire commingled fund is 

subject to the constructive trust unless the trustees can 

distinguish the funds to which they personally are entitled. 

 In stating the burden of proof applicable to these 

proceedings, we first observe that a constructive trust arises 

by operation of law to prevent what otherwise would result in a 

fraud. See Crestar Bank v. Williams, 250 Va. 198, 204, 462 

S.E.2d 333, 335 (1995); Leonard v. Counts, 221 Va. 582, 589, 272 

S.E.2d 190, 195 (1980). The chancellor's imposition of a 

constructive trust, which we approved in Tauber I, reflected his 

determination that the defendants had wrongfully diverted the 

assets of JMHI into other entities and business opportunities 

for their personal benefit. 

 On remand, the chancellor was required to fix the amount of 

JMHI's assets held by the defendants as trustees in dissolution 

of the charity. As the successful proponent of the constructive 

trust, the Commonwealth bore the initial burden on remand of 

tracing JMHI's assets and establishing the amount of its 

intangible assets. See Crestar Bank, 250 Va. at 204, 462 S.E.2d 

27
at 335-36; Watts v. Newbury, 107 Va. 233, 240, 57 S.E. 657, 659 

(1907). However, to the extent that the defendants commingled 

their own property with JMHI's assets and sought recovery of 

such property, they had the burden of proving how much of the 

commingled funds they owned personally. See Brown v. Coleman, 

566 A.2d 1091, 1097 n.7 (Md. 1989); Bass v. Smith, 56 A.2d 800, 

805 (Md. 1948); MacBryde v. Burnett, 132 F.2d 898, 900 (4th Cir. 

1942); V Austin W. Scott & William F. Fratcher, The Law of 

Trusts § 515, at 609 (4th ed. 1989). The defendants bore this 

evidentiary burden because when trustees conduct their affairs 

in a manner that prevents a precise accounting of trust assets, 

the trustees, rather than the trust, must suffer the 

consequences. Am. Nat'l Bank v. Ames, 169 Va. 711, 750, 194 

S.E. 784, 798 (1938); see Royall v. Peters, 180 Va. 178, 189, 21 

S.E.2d 782, 787 (1942); First Nat'l Bank v. Commercial Bank & 

Trust Co., 163 Va. 162, 175, 175 S.E. 775, 779 (1934). 

Evidence Tracing JMHI's Assets

 The defendants argue that the Commonwealth's accounting, on 

which the chancellor relied, was "flawed" and did not account 

for the "separate income" attributable to JMHC and JMHJV. They 

also contend that JMHI did not have an ownership interest in the 

hospital or in its underlying land, and that the Commonwealth 

failed to trace JMHI's assets into the Beauregard Building, the 

HGV lease, and the INOVA transactions. The defendants also 

28
assert that the chancellor erred in rejecting their accounting, 

which they claim properly identified their separate personal 

assets. 

 In response, the Commonwealth argues that its evidence was 

sufficient to meet its burden of tracing JMHI's assets and of 

establishing the amount of its intangible assets. We agree with 

the Commonwealth. 

 We consider the parties' arguments in the context of the 

chancellor's March 1997 order, which provided the framework for 

his determination of the amount of JMHI's assets. As stated 

above, in that order the chancellor directed the defendants to 

submit "a full and complete accounting of all [JMHI's] assets 

and liabilities that . . . shall disclose all rents, issues, 

profits, accretions, and benefits, tangible and intangible, 

which have accrued therefrom." 

 In response to the chancellor's directive, the defendants 

submitted Cobb's accounting, which did not satisfy these 

requirements identified by the chancellor. Instead, Cobb 

attempted to place a value on the charity through the use of 

hypothetical dissolution dates of 1975, 1982, 1992, and 2005. 

This methodology was a complete departure from that used by the 

Commonwealth's accountant, Wilson, who structured his accounting 

of JMHI's assets in accordance with the requirements stated in 

the chancellor's decree. 

29
 The chancellor's decision to reject Cobb's approach was 

supported by Wilson's testimony. Wilson explained that Cobb's 

approach was not a fiduciary accounting because Cobb did not 

attempt to determine what actually had occurred with regard to 

JMHI's assets and liabilities, but merely made estimations 

regarding JMHI's value on certain dates. Wilson indicated that 

the use of this approach was unsound because JMHI was never 

liquidated and, thus, any valuation information was merely 

hypothetical in nature. Based on this evidence, we conclude 

that the chancellor did not err in rejecting Cobb's valuation 

approach. 

 We also hold that the chancellor did not err in accepting 

the Commonwealth's evidence tracing JMHI's assets. First, 

Vella's testimony supported the chancellor's award of the real 

property, including the improvements, to the Commonwealth. 

Vella, an expert in real property and title issues, stated that 

JMHI owned the Berman Parcel, which was also known as the 

Beauregard Street Parcel. In addition, she stated that JMHI 

owned a 65% undivided interest in the entire portion of land 

comprising Hopkins Parcels 1 and 2, as well as a parcel of land 

that overlapped Hopkins Parcels 1 and 2. Vella also testified 

that JMHI owned the beneficial interest in the hospital building 

and also owned all structures and improvements built on Hopkins 

Parcels 1 and 2 and the Berman Parcel. These buildings included 

30
the Beauregard Building, which was built partly on the Berman 

Parcel. 

 Second, Wilson's accounting testimony and supporting 

documentary evidence satisfied the Commonwealth's burden of 

tracing JMHI's other assets. This evidence established that the 

primary value of the hospital derived from its operating 

license, which Wilson described as the "engine" that propelled 

the charity. Wilson testified that because the hospital 

operated as a "going concern" until the time of the 1994 INOVA 

Agreement, the hospital license generated many financial 

opportunities that Wilson identified as belonging to JMHI, 

rather than to the defendants and their "for-profit" entities. 

These opportunities included the 1982 HGV lease and the INOVA 

transactions. 

 As stated above, Wilson determined that the value of JMHI's 

assets, excluding the real property and improvements, subject to 

the constructive trust totaled $26,372,438 as of June 30, 1999. 

He also concluded that an additional $24,703,145 will accrue to 

the benefit of the constructive trust under the terms of the 

1994 INOVA Agreement. Thus, we conclude that the evidence 

accepted by the chancellor adequately traced JMHI's assets, 

including the amount of its intangible assets. 

Acquisition and Construction Costs

31
 The defendants argue that the chancellor erred in denying 

them credit for acquisition and construction costs relating to 

JMHI's assets that were subject to the constructive trust. They 

assert that they are entitled to a credit for "sums advanced in 

transactions declared void by the Commonwealth," and for the 

purchase price paid by Gondor for the above-described interest 

in property he purportedly purchased in his own name. We 

disagree with the defendants' arguments. 

 In the chancellor's July 13, 2000 letter opinion awarding 

judgment in favor of the Commonwealth, he directed the parties 

to schedule a hearing for the determination, among other things, 

of any credit due to the defendants for acquisition costs. The 

chancellor also stated that he would consider whether the 

defendants were entitled to a credit for "improvements to the 

realty actually incurred." At a hearing in November 2000, the 

defendants did not present any testimony but argued from the 

evidence already presented that the costs expended in acquiring 

the properties and in building the improvements should be 

credited to them. 

 After considering the parties' arguments, the chancellor 

denied the defendants' request for such credits. We hold that 

the record supports the chancellor's decision. The defendants 

did not meet their burden of proving that their personal funds, 

rather than funds received from the operation of the hospital or 

32
from some other source, were spent to acquire property in JMHI's 

name or to construct improvements on property already owned by 

JMHI.

 We also observe that the balance of the record fails to 

support the defendants' request for cost credits. Most notably, 

as stated above, the evidence showed that they diverted about 

$51 million of the charity's present and future assets into the 

"for-profit" entities in which they participated. They also 

received funds from the redemption of shares initially conveyed 

to them by JMHC in 1971 at the time of the failed "merger." The 

record shows that the defendants obtained at least $508,000 in 

these redemption transactions. Finally, the defendants' 

accountant, Cobb, acknowledged that the defendants made only one 

capital contribution to JMHI, which was repaid to them within 

two years. 

Donations to Other Charities

 We also find no merit in the defendants' argument that the 

chancellor improperly included in his award assets purportedly 

transferred by JMHJV to two charities, which are controlled by 

Tauber as trustee. These alleged donations were made after 

JMHI's dissolution, and the defendants failed to prove that the 

"donations" were made from their own personal funds, rather than 

from the assets of JMHI that were subject to the constructive 

trust. 

33
Prejudgment Interest

 The defendants argue that the chancellor erred in 

calculating the award of interest from the date he issued his 

July 13, 2000 letter opinion rather than from February 21, 2001, 

the date of his decree awarding the $20 million judgment to the 

Commonwealth. Citing Code § 8.01-382, the defendants assert 

that interest may be awarded only from the date of entry of a 

judgment or decree. We disagree with the defendants' argument. 

 We consider the language of Code § 8.01-382 in accordance 

with its plain meaning. See Vaughn, Inc. v. Beck, 262 Va. 673, 

677, 554 S.E.2d 88, 90 (2001); Cummings v. Fulghum, 261 Va. 73, 

77, 540 S.E.2d 494, 496 (2001). This statute provides, in 

relevant part, that when an action or a suit is heard by the 

court without a jury, the court "may provide for interest on any 

principal sum awarded, or any part thereof, and fix the period 

at which the interest shall commence." 

 The plain language of Code § 8.01-382 gave the chancellor 

discretionary authority to determine whether the Commonwealth 

was entitled to prejudgment interest and to fix the date from 

which such interest was due. The chancellor's decision awarding 

interest on the monetary portion of the judgment from July 13, 

2000 effectively provided prejudgment interest at the statutory 

rate between July 13, 2000 and the date of the chancellor's 

decree, February 21, 2001. We conclude that based on the 

34
extended duration of this suit, and the overwhelming evidence in 

the record against the defendants, the chancellor's decision to 

award interest from July 13, 2000 was not an abuse of his 

discretionary authority under the statute. 

Appeal Bond

 Finally, the defendants argue that the chancellor erred in 

ruling that Code § 8.01-676.1(C) provides the sole method by 

which a court may suspend execution of a decree pending appeal. 

The defendants assert that this statute does not limit the 

chancellor's "inherent authority" to set a bond in an amount 

less than the judgment to stay execution of a decree. We 

disagree with the defendants' arguments. 

 The plain language of the statute governs our analysis. 

See Vaughn, 262 Va. at 677, 554 S.E.2d at 90; Cummings, 261 Va. 

at 77, 540 S.E.2d at 496. In relevant part, Code § 8.01-

676.1(C) provides that an appealing party who requests a 

suspension of execution of a judgment during an appeal "shall 

. . . file an appeal bond or irrevocable letter of credit 

conditioned upon the performance or satisfaction of the judgment 

and payment of all damages incurred in consequence of such 

suspension, and . . . execution shall be suspended upon the 

filing of such security and the timely prosecution of such 

appeal." 

35
 This statutory language does not give the trial court 

discretion to set an appeal bond in an amount less than the 

judgment. The purpose of the statute is to secure payment of 

the full judgment amount and all damages incurred as a result of 

the suspension of execution of the court's decree. A lesser 

amount would undermine the security of the judgment to which a 

prevailing party is entitled in the event that an appellant does 

not succeed on appeal. Thus, we hold that the chancellor did 

not err in requiring the defendants to post an appeal bond in 

conformance with the mandatory terms of the statute.

Amount of Judgment

Asserting cross-error, the Commonwealth contends that the 

chancellor erred in failing to award the Commonwealth the full 

amount of diverted assets identified by Wilson in the amount of 

about $51 million. The Commonwealth contends that it is 

entitled to that amount, rather than the $20 million amount 

awarded by the chancellor, based on the evidence presented and 

the defendants' failure to meet their burden of proving any 

separate sums to which they were entitled. Thus, the 

Commonwealth argues that the chancellor improperly reduced the 

award from the total sum that he determined the defendants would 

have been liable to pay under "strict accounting rules." In 

response, the defendants ask us to reject the Commonwealth's 

36
argument, asserting that the chancellor failed to make any 

findings supporting such an award to the Commonwealth. 

 In resolving this issue, we first observe that the 

chancellor accepted the Commonwealth's accounting but cited 

general principles of "equity and fairness" in support of his 

decision reducing the amount of the award. He also noted the 

fact that JMHI's property included valuable real estate, and 

that "the benefit to other charities will be substantial even if 

[the defendants] are not required to account dollar-for-dollar, 

and the purposes of this cause will be served." The chancellor 

entered judgment in the reduced amount after finding that the 

Commonwealth had proved that the defendants diverted from JMHI 

the sum of $26,372,438 in present net revenues, and an 

additional sum of $24,703,145 in future net revenues, for a 

total lost revenue amount of $51,075,583. 

 We conclude that because the assets at issue were funds 

belonging to a charity, the chancellor erred in reducing the 

amount of the award from the sums established by the evidence he 

had approved. In effect, the chancellor's award permitted the 

defaulting trustees of JMHI to retain significant assets of the 

charity that belong to the public. This result was erroneous. 

The defendants, as fiduciaries, were precluded from retaining 

any of these assets because they "acquired no property rights 

in, nor were they equitably entitled to such assets, either 

37
during the lifetime of the [non-profit] corporation or upon 

dissolution." Tauber I, 255 Va. at 455, 499 S.E.2d at 845 

(quoting Hanshaw v. Day, 202 Va. 818, 824, 120 S.E.2d 460, 464 

(1961)).

Attorneys' Fees and Costs

 The Commonwealth also assigns cross-error to the 

chancellor's decision denying the Commonwealth attorneys' fees 

and costs, asserting that the fees were incurred because the 

defendants failed to execute their duties as trustees in 

dissolution and evaded their accounting obligations under the 

chancellor's March 1997 decree. The Commonwealth contends that 

an award of attorneys' fees would have been appropriate under 

our decision in Prospect Development Company v. Bershader, 258 

Va. 75, 515 S.E.2d 291 (1999), and that an award of costs should 

have been made under Code § 26-23. 

 Upon consideration of these arguments, we conclude that the 

chancellor did not abuse his discretion in failing to award 

attorneys' fees and costs. In Bershader, a fraud suit, we 

approved a chancellor's award of attorneys' fees when the 

evidence showed that the defendants engaged in "callous, 

deliberate, deceitful acts," which caused the plaintiffs to 

incur over $150,000 in attorneys' fees. Id. at 92, 515 S.E.2d 

at 301. We acknowledged the discretionary nature of the 

chancellor's authority and held that he did not abuse that 

38
discretion based on the amount of effort required to protect the 

defrauded parties' rights. Id. at 92-93, 515 S.E.2d at 301. 

 Unlike Bershader, this case does not involve a review of an 

award of attorneys' fees, but concerns the chancellor's failure 

to award such fees. Thus, the Commonwealth effectively asks us 

to conclude that under the facts of this case, the chancellor 

was required as a matter of law to award attorneys' fees to the 

Commonwealth. We decline to restrict the chancellor's 

discretion in this manner. Although the defendants engaged in a 

longstanding course of self-dealing at the expense of JMHI, 

which would have supported an award of attorneys' fees under the 

evidence presented, we cannot say that the chancellor lacked the 

discretion to deny attorneys' fees after considering the other 

relief awarded. 

 We also disagree with the Commonwealth's contention that 

the chancellor erred in failing to award the Commonwealth its 

costs under Code § 26-23 for the preparation of its accounting. 

Code § 26-23 provides: 

The costs of all proceedings against fiduciaries 

failing, without good cause, to make the returns and 

exhibits required, shall be paid by them personally, 

and they shall receive no allowance for the same in 

the settlement of their accounts. 

 This statute is limited to an award of costs related to 

proceedings instituted against fiduciaries who fail to make 

returns required by statute in performance of their duties in a 

39
chancery case. Thus, this provision has no application to the 

present case and did not provide the trial court the authority 

to award the Commonwealth its expert witness fees for its 

accounting. 

 Finally, we have considered, and reject, the other 

arguments presented by the defendants in this appeal. 

VI. CONCLUSION 

 For these reasons, we will reverse the monetary portion of 

the chancellor's award and enter final judgment for the 

Commonwealth as trustee in the amount of $26,372,438, with 

interest from July 13, 2000 at the judgment rate fixed by Code 

§ 6.1-330.54. We will affirm the chancellor's judgment in all 

other respects, including the real estate interests awarded to 

the Commonwealth as trustee. 

 We will remand the case to the chancellor for execution on 

the appeal bond, collection of the judgment, and for 

distribution of JMHI's current assets in accord, as nearly as 

possible, with the charitable purposes to which they should have 

been devoted. The constructive trust imposed by the chancellor 

on the proceeds due from the 1994 INOVA Agreement will continue 

for the duration of that Agreement for receipt of future net 

revenues due after June 30, 1999, in the amount of $24,703,145. 

Such sums will be paid when due into the Circuit Court for the 

City of Alexandria for distribution by the chancellor in 

40
accordance, as nearly as possible, with the charitable purposes 

to which they should have been devoted. 

 Affirmed in part and final judgment,

reversed in part, modified, and final judgment as modified,

 and remanded.

41