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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 1611
Experience:  Run my own successful business/contract law practice.
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I represent 65 doners to, a young $600K, scholarship endowment

Customer Question

I represent 65 doners to, a young $600K, scholarship endowment fund in New York State, that is underwater. Our agreement with the College is restricted, in perpetuity, and it does not specificilly say that funds can be spent from principal, or if Fund is underwater.
1. how and when can funds be spent.
2. Can the agreement between the Collage and me(the doner) be changed to allow funds to be spent, without Attourny Generals' approval.
Submitted: 7 years ago.
Category: Business Law
Expert:  Law Pro replied 7 years ago.
Please explain with a little more information what's going on here. Thanks!
Customer: replied 7 years ago.
In 2005 the graduates of the class of 1956, of a State University College set up a scholarship endowment fund specifucally for incomming students. The agreement is signed by doner fund chaimen and College president. The fund, at signing was $75K, however between 2006 and 2008 contributions totaled 600K.(which is todays Historc dollar value). The fund has dropped to about $455 due to market conditions. Accordingly we are underwater. Can the fund spend anything on scholarships this year, and if so under what conditions.
Expert:  Law Pro replied 7 years ago.

Yours would not be the only fund that has been hit by the economic conditions.

 

Yes, you could spend monies on scholarships if the fund would allow you. What do the articles say about your ability to distribute and manage the fund?

Customer: replied 7 years ago.

Thank you for your initial comment. Our agreement says:

The class of 1956 Scholarship Committee intends the Fund to continue in perpetuity. The Scholarships will be awarded from 5% of the fund to incoming students, as payment against tuition, or such other related purpose as my be approved from time to time by the Class of 1956 Scholarship Committee. The selection of such student is at the discretion of the President of the College in accoddance with the terms and conditions of this Memorandum of Agreement.

Expert:  Law Pro replied 7 years ago.
I'm going to check on something and get back to you on this.
Customer: replied 7 years ago.
Do you have anything further. If so, please advise.