The War of Words Begins: NFDA/Selected Merger Halted by TRO
The fight between Selected Independent Funeral Homes and 17 of its constituent members looks as if it will continue on through November following a court order suspending the proposed deal to join the NFDA. This week, the member coalition was granted a temporary restraining order halting the vote and requiring the board of directors to release more details about the deal for member review. Judge Christine Croce of the Summit County (Ohio) Court of Common Pleas, granted the TRO following a brief review of the facts.
While discussions about a possible combination of the groups began around a decade ago, it wasn’t until earlier this year that the executive directors of both organizations decided to pull the trigger and approach their boards. By July, the Selected board signed a non-binding Letter of Intent to join the NFDA. Shortly after, the board shared the Plan of Dissolution with its members, setting an online vote Sept. 24 – Oct.8.
Association rules require a simple majority to pass a measure like this. Several members expressed concerns about the lack of available details and the dearth of discussion about alternatives for securing Selected financial well-being into the future.
An Inauspicious Beginning
In early September, NFDA executive director Christine Pepper was a surprise guest speaker at the Selected annual meeting, making the case for the membership to vote for Selected to join the NFDA. This was the first time members had assembled since the dissolution notification. Accounts from the floor were mixed about the board’s reaction and response to questions and concerns. Some members who were on the fence about the vote were disappointed in what they saw as a lack of transparency in the process.
The following week, 17 funeral home owners who had been thwarted in their attempts to get more detail before the vote got together and formed what’s been referred to as an opposition. They appealed together for more information and even tried to take Selected board member Dave Moore up on his invitation to put together an alternative solution. The offer was rebuffed.
The now-plaintiffs/then-opposition sent formal letters on Sept. 15 and 22 asking the board to pause the vote and share complete details about the agreement. They argued that without this information the vote violated D.C. Nonprofit Corporation Act guidelines because members were asked to vote without key information. The details they sought included the actual payout Selected would receive (the NFDA has been adamant that this isn’t a sale); objective asset valuations and wind-up cost estimates; any future compensation or job arrangements for Selected’s leadership; and the long-term plan for the Selected Educational Trust.
Selected shared its financial audit and the signed Letter of Intent on Sept. 28–29, but denied any wrongdoing, declined to delay the vote, and held off on providing further records.
Because the board pressed forward, the plaintiffs filed an emergency lawsuit on Oct. 5 to pause the process. Judge Croce’s Oct. 6 TRO prevents Selected from closing, counting, or acting on the member vote. The judge noted that the plaintiffs raised valid concerns about their legal right to proper disclosures and faced real harm if the vote closed as scheduled on Oct. 8. Selected has been formally served and has 28 days to respond.
Where They Stand Today
Following receipt of the TRO, the Selected board issued this letter to the membership explaining their position and intent to continue this fight in court. In the letter, the board points out that the TRO was granted without input from Selected and says that all disclosures and procedures have fully complied with association bylaws and applicable nonprofit laws. In the letter, they listed 16 of the 17 plaintiffs, omitting sixth-generation owner Paul St. Pierre.
The plaintiffs responded with a missive of their own. In it, opposition member and sixth-generation funeral director Nathanael Billow points out that the legal challenge arose after months of friction and reaffirms the view that leadership failed to provide the requested information. He also provided members with a link to the TRO and supporting documents, in which the judge found that the plaintiffs showed a substantial likelihood of success regarding their statutory right to required disclosures under D.C. law.
Billow’s letter goes on to explain the venue in which the TRO was filed and to clarify the group’s aims. It also points out Selected’s earlier omitted the TRO’s requirement that it to disclose the requested information. The board, in its letter, has denied that there’s any more information due to the membership under the law. That is, there’s no dispute that there is more information, only whether the membership deserves to see it. That’s one of the reasons Selected will defend itself in court.
From here, should Selected elect to release the requested information, members would get 30 days to review the documents before the vote resumes. If Selected chooses instead to defend its position in court, a new date likely would have to be set depending upon how long the case takes to resolve.
None of the Selected board have responded to requests for comment.
