Case Study Essay

2486 Words Mar 24th, 2008 10 Pages
Summary of Facts and Circumstances

Peter and his wife Catherine started to collect contemporary art in the 1970’s after she was forced to give up her legal career due to an illness. In June 1981 Peter was invited to join the MCA board of trustees. In 1989 Peter was elected the board chairman. He then devoted more time to managing the MCA with the hope that his business acumen could make MCA a more nationally prominent museum. At the start of 1989 Keith Schmidt was hired as MCA’s executive director. One of the first things he did was to set goals for the museum. He wanted it to be the best museum in the Midwest and among top five across the nation in five years. There was constant tension between Peter and Keith. It became visible to
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7. Did MCA take adequate due diligence with respect to the investments and their returns?
8. What financial impact occurs for MCA?

Decisions That MCA Needs To Make

1. Peggy Fisher needs to decide if she wants to sue Peter or to confront him first.
2. MCA needs to think about the impact that the lawsuit will have on them.

The Law that applies to this case:
Judicial decisions tend to enforce charitable pledges as a matter of public policy. Based upon public policy, courts want subscribers to keep their deliberate promises to contribute. The tendency, therefore, is to adopt a rule that will sustain a subscription as a legal obligation.

What were the terms of this pledge agreement? The MCA began construction of the new facility in 1993 and completed it in 1996. They did not receive payments, nor did they enforce any of the pledges that were received to secure the new museums construction. The MCA should have installment payments under the pledge agreement that corresponded with the project's construction schedule. Every pledge agreement should specify payment dates. When pledges are to be made during the donor's lifetime the installment payments are important for purposes of making the donor aware that the pledge is not an indefinite gift that can be paid at donor's will.

Will the MCA seek to enforce the pledge? This question assumes that the pledge did not have contingency clause in it.

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