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Lynch v. John M. Redfield Foundation

California Court of Appeal

88 Cal. Rptr. 86 (1970)

Facts

The John M. Redfield Foundation (the foundation) (defendant) distributed dividends on its investments to various donees. The directors of the foundation began to disagree on the appropriate donees for these distributions. During this disagreement, the foundation continued to receive dividends, but the dividends simply sat untouched in the foundation’s checking account, earning no interest, for a period of five years. The attorney general (plaintiff) sued the foundation, alleging that the foundation’s directors mismanaged the foundation by failing to invest the accumulated income. The trial court held that five years was not an unreasonable amount of time for the directors to maintain the dividends without investing them. The attorney general appealed.

Rule of Law

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Issue

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Holding and Reasoning (Schweitzer, J.)

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A "yes" or "no" answer to the question framed in the issue section;
A summary of the majority or plurality opinion, using the CREAC method; and
The procedural disposition (e.g., reversed and remanded, affirmed, etc.).

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