A hearing is slated for March 23 on the yearslong legal battle between Community Foundation of the Ozarks Inc. and Springfield Community Center Inc.
The nonprofits’ tussle centers on $500,000 secured by SCC from the sale of its building at 618 N. Benton Ave. more than a decade ago. The proceeds were entrusted in 2004 to CFO, which essentially served as a bank but ultimately used the money to pay a loan, according to depositions in the case filed in Greene County Circuit Court.
SCC is a member agency of Ozarks Food Harvest Inc., and its programs donate food to impoverished children and families, largely through after-school meals.
Among other duties, CFO acts as a financial steward and adviser of charitable holdings, growing since its 1973 inception to encompass some $268 million in assets, as of June 2017, according to the organization.
CFO, however, was served in 2013 after SCC determined in 2011 that its $500,000 was missing. The case centers on whether the nonprofit authorized CFO to transfer the money and what documents, if any, prove it.
“It’s about accountability,” said Bolivar-based attorney Jay Kirksey, who is representing Springfield Community Center. “When SCC, like anybody else, entrusts money with CFO, they should be accountable for their conduct. If you’re going to hold somebody’s money in trust, by gosh, that’s a serious fiduciary responsibility.”
SCC sold its Benton Avenue property in 2004 to Advocates for a Healthy Community Inc., aka Jordan Valley Community Health Center.
On March 2, 2004, SCC wrote a $500,000 check to CFO, then transferring the property-sale proceeds into a trust within the organization, according to court records provided to Springfield Business Journal by Kirksey Law Firm LLC.
SCC maintained rights to the money under an agreement with CFO that allowed SCC to use the trust as a sort of bank account, only for SCC programs, according to SBJ’s review of pretrial depositions with current CFO President and CEO Brian Fogle.
On March 9, 2004, however, CFO allegedly removed the $500,000 from SCC’s account and transferred the money into a “Jordan Valley Park Development Fund,” an account owned by CFO that SCC could not access, according to the depositions.
The depositions indicate CFO subsequently used the money to pay a “nonrecourse” loan rooted in past dealings with Conco Cos., a local construction-materials outfit, and tax credits used to create the Creamery Arts Center on Sherman Parkway. The center opened in 2002.
A centerpiece of the case is CFO’s documentation, or perhaps lack thereof, concerning the transfer.
According to Fogle’s depositions, CFO practices a three-tier documentation system – the actual request, an initiation form and a distribution letter – to record asset transfers. None of those records are available concerning the March 9, 2004, transfer, according to the depositions.
SCC, led by President and CEO Calvin Allen, maintains the organization did not request the transfer, in written form or verbally, and CFO asserts the documentation once existed but has not since resurfaced. Fogle’s depositions also suggest no previous knowledge exists regarding a verbal agreement with SCC to transfer the funds.
“Our staff that was here then does believe there was a record of it that no longer exists, you know, 13 years later,” Fogle said of written documentation during a recent interview with SBJ.
Attorney Charles Cowherd of Spencer Fane LLP is representing CFO. He declined to comment on the pending litigation.
Gary Funk had served as CFO’s president and CEO during the time of the transfer. Fogle began working for CFO in late 2008, and officially succeeded Funk in 2010.
Key to the plaintiff’s claims, two days after transferring the half-million dollars to its Jordan Valley fund and ultimately paying the money to privately owned Conco Cos., CFO issued a March 11, 2004, memo to SCC confirming receipt of funds, with $500,000 being the “establishing amount.”
The memo, however, didn’t note that the money already had been cleared from the fund.
SSC also should have received quarterly updates on the money, according to depositions.
The updates, according to the depositions, allegedly were halted by the upper ranks of CFO.
It remains unclear who at the organization suspended the updates, though only Funk or current CFO Chief Financial Officer Susanne Gray would have had such authority, according to the court records.
Only one quarterly update has surfaced in the case.
It dates back to 2004 and shows a June 30, 2004, SCC had a fund balance of just $58.98. Near the top right-hand corner of the document, Gray allegedly handwrote the words “not sent,” according to depositions in the case.
SCC reportedly found for the first time in 2011 that the $500,000 had been emptied from its account, some seven years earlier. The organization filed suit in 2013.
The upcoming hearing covers past and pending motions filed in the case. A jury trial has been set to commence July 16 in the Circuit Court in Springfield.
Cape Girardeau-based carGo Technologies LLC launched its ride-hailing and delivery services in the Springfield market; the 90-bed, $8.7 million Lake Stockton Healthcare Facility began operating; and First Home Bank officially changed its name to Stockmens Bank.
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