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Kraus Warns of Legal Issues for LNC

Former LNC staff member Robert Kraus warns of potential legal issues that may face the LNC.  (This article was much of a comment by Robert Kraus, and has been elevated to article status.

Reminder: The Chair & other officers of the LNC continue to be in direct violation of DC Non-profit Code – in particular:

Standards of Conduct (D.C. Code §§ 29-406.30, 406.32, 406.42, 406.70, 406.80)

An individual director or officer must discharge his or her duties in good faith, in a manner that he or she reasonably believes is in the best interests of the corporation, and with either the care that a person in a like position would reasonably believe appropriate under similar circumstances (directors) or with the care an ordinarily prudent person in a like position would exercise under similar circumstances (officers).

Conflicted Interest Transactions. Transactions between the corporation and any director, officer, or member having an interest in the transaction shall not be void or voidable solely for that reason, provided the transaction is fair to the corporation at the time it is authorized or provided the material facts as to the relationship or interest are disclosed and the transaction is then approved in good faith by vote of the disinterested directors or the members.

Business Opportunities. A director may avoid liability for taking for himself, directly or indirectly, a business opportunity in which the nonprofit corporation may be interested, provided the director first brings the opportunity to the corporation’s attention and the corporation disclaims its interest in the opportunity pursuant to the procedures for a conflicted interest transaction (i.e., the material facts as to the relationship or interest are disclosed and the opportunity is disclaimed in good faith by vote of the disinterested directors or the members).

Also, the notification/vote must come BEFORE the action NOT after.