Headed to Court? Selected Board Faces AG Complaint Over NFDA Merger Details

When lawyers representing the members of Selected sent a demand letter to the organization’s board of directors it was the second good faith, goodwill effort made to slow the proposed subsumption of Selected by the National Funeral Directors Association. The first was in response to an offer by David Moore, the Selected board chair, to consider any well developed business plans. Members came forward to help only to discover that it wasn’t a serious offer. 

The demand letter asked for specific information related to the proposed transaction. Information the board is bound to provide according to its own bylaws. As with the response to the first act of good faith, Selected appeared as if it were going to comply. And as with the actual response, it fell well short. While the organization did provide one of the requested items, the deal’s Letter of Intent (we’ll get back to that in a second) it ignored the other requests including describing what would happen to all the member’s personal and business information kept by Selected.

Taking the Board to Court

As a result, the members are filing a formal complaint with the Attorney General for the District of Columbia seeking an injunction on the vote until the board conforms to its own rules. I can’t be clear enough here: the Selected board of directors, which claims the institution is in such dire financial straits that it can no longer operate independently, would rather fight its members in court than reveal the details of the deal they’re asking them to vote on. Digging into it only makes the decision more baffling.

Recently, I reported elsewhere on the Letter of Intent’s details as I had heard them. Since publishing that story, a copy showed up (see below). If you are or know a lawyer who can parse it, all the better. I’ll admit to relying on AI to support my interpretation. 

First, it assures me that this is a standard form of contract, that is equitable insofar as it protects Selected Funeral Homes during the combination of the two entities. Once the contract is signed, though, almost none of the provisions are binding to the NFDA. 

This is directly from my associate editor (Gemini):

Me: Is having to wait a year to dissolve Selected nonbinding? 

Gemini:Yes, it is non-binding. The clause regarding Selected’s dissolution—along with the rest of Section I—is explicitly categorized as one of the Non-Binding Provisions under the Letter of Intent (LOI).

Permanent Surrender, Temporary Protections

The proposed transaction raises significant long-term concerns for Selected. Under the agreement, Selected is slated to completely dissolve as a standalone nonprofit entity following the asset transfer to the NFDA. This step is legally irreversible: once dissolved, Selected ceases to exist as a corporate person. It will no longer have an independent board, legal standing, or any operational structure to protect its members or enforce the promises made during merger negotiations if disputes arise down the road.

Furthermore, the structure of the deal surrenders ultimate operational control to NFDA while offering Selected’s leadership and members only temporary, advisory protections. The LOI explicitly grants NFDA “sole and ultimate discretion” over all acquired programs, activities, and assets. While a “Selected Executive Counsel” composed of former Selected board members is designated to advise on these programs, NFDA is under no obligation to accept their recommendations. 

Most of the safeguards designed to ease the transition carry built-in expiration dates: existing Selected programs and services are guaranteed against material change for only one year post-closing, and the two temporary voting seats allocated to Selected on NFDA’s Board of Directors expire after 2030. 

The Fine Print

In the immediate term, the LOI also puts heavy operational restrictions on Selected while placing the underlying risks squarely on its shoulders. During the 180-day negotiation window, Selected is bound by a legally enforceable exclusivity clause that prevents it from seeking alternative partners or third-party offers. This is a real problem given that Moore offered to accept alternative ideas, suggesting he did not understand the full scope of the contract Selected signed.

Selected is also prohibited from entering major business contracts or making key staffing changes without first consulting NFDA, all while remaining fully responsible for its own operational expenses and financial liabilities. Ultimately, this arrangement asks Selected to surrender its independent brand, peer network, and corporate existence in exchange for interim advisory roles and short-term guarantees that quickly sunset into NFDA’s complete, discretionary control.

Should the injunction succeed in wresting more details from Selected, it will be interesting to see what other parts of the deal they protected in violation of their bylaws. As it stands now, barring injunctive relief, that this may be a fatal blow for Selected. A protracted legal fight over a divisive up-or-down vote about the organization’s future bodes well for no one.