Weighing Ch. 11 For Nonprofits In The 5th Circ.

Law360, New York (March 2, 2011, 3:12 PM EST) -- The recent Save Our Springs decision highlights those obstacles faced by certain nonprofits.[1] In this decision of import for financially strapped nonprofits, the Fifth Circuit has held that “voluntary pledges [from donors] alone are too speculative to provide evidence of [plan] feasibility.”[2]

Background

S.O.S., a nonprofit charitable organization, commenced lawsuits against municipalities and developers in an effort to require what it believed to be responsible use of aquifers in Texas.[3] Certain of these lawsuits resulted in attorneys’ fee awards against S.O.S.[4] Unable to satisfy these awards,...
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