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As you may know, on May 26, 2004 the Humane Society petitioned the Marion County Probate Court for permission to pledge the principal of a public charitable trust (the Crume Trust) in order to secure a $1.7 million line of credit to HSI so that it may keep its doors open (HSI's "Request to Borrow").  In that pleading, HSI confirms that it is on the brink of bankruptcy  (In Re: Mary Powell Crume Trust  Cause No. T62, p 11).  This is the third and final charitable trust HSI will have run through. 
 
Several animal welfare groups have filed their objection to permitting any beneficiary to use assets of a public charitable trust as a line of credit for the beneficiary; particularly when that beneficiary has depleted its own treasure chest of more than $10 million in the last 3 years.  The Grantor of the trust intended it to be used for the care and relief of animals; not as a bail out fund.
 
My clients -- Alliance for Responsible Pet Ownership, Inc., Home for Friendless Animals, Spay-Neuter Services of Indiana, Inc., Southside Animal Shelter, Inc. and Move to ACT -- have made several proposals to the Attorney General's office as alternates to HSI's plan to put public charitable trust assets at risk.   We want to be part of the solution, not part of the problem.
 
We propose a short-term fix that will provide cash infusion to HSI, while protecting the interests of the charitable trust and AVOIDING setting the absurd precedent of allowing a spendthrift beneficiary to use public charitable trust assets as an ATM or credit card.  First, we ask that a special administrator be appointed for a limited purpose, pursuant to the probate statutes - - this is because HSI, as trustee, has a conflict of interest and the special administrator will ordinarily have more expertise in reviewing financial or business transactions that would a judge.
 
Second, we recommend that the Crume Trust purchase from HSI at least one parcel of real estate owned by HSI, such as a 2-acre lot used for overflow parking; or a 4-acre parcel close by that is currently undeveloped.  The special administrator will review the appraisals and the transaction to ensure that it is fair and reasonable to the Crume Trust.
 
The advantages:  (A) HSI gets a cash infusion and continues operations; (B) the real estate does not get sold to a third party -- rather it remains "in the family" and can continue to be of use to HSI; (C) WE BUY EVERYBODY MORE TIME to consider alternatives and to bring other parties, such as the City of Indianapolis, to the table to dialogue and resolve concerns; and (D) most importantly to my clients and to the community, the assets of the public charitable trust remain intact and are not put in jeopardy as collateral for a (presently) less-than-credit-worthy debtor.
 
I spoke with the Attorney General's office yesterday to proffer this "band-aid" and it was well-received.  We hope that HSI also receives it well and cooperates in buying some additional time to get the correct organizations and municipalities involved to develop a long-term fix.  This community cannot afford HSI to go under; but it also cannot afford to put public charitable assets at risk when those assets can be used in the future by other charitable organizations who provide the same or similar services as HSI.
 
Roni Jarnagin,  Attorney for ARPO, HFA, SNSI, Southside and Move to ACT
   
   
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