My office—the Tennessee attorney general’s charity unit—recently received a call from a judge.  She was adjudicating a foreclosure that had advanced to the stage in which the debtor’s assets would soon be sold at auction.  The judge was concerned because the debtor in this case was a nonprofit, and she realized that the parties had not involved our office in the foreclosure process.  As a result, the judge invited our office to attend the next meeting on the status of the foreclosure.

The only parties present at the  meeting were the lender and the court-appointed receiver for the nonprofit’s assets.

When we asked about the status of the nonprofit, the lender told us that the board members had all resigned and that the nonprofit had no management.

Apparently, once the board of directors realized that the nonprofit was no longer financially viable, its members washed …

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