New York Section 804 Not-for-profit Corporation Law Example Case

In Alco Gravure, Inc. v. Knapp Found. (64 NY2d 458, 479 NE2d 752, 490 NYS2d 116 [1985]), the Court of Appeals held that a court reviewing an application under Not-For-Profit Corporation Law 804 of a type B not-for-profit corporation requesting an amendment to its certificate of incorporation allowing it to change its purposes to ones inconsistent with the purposes for which it was originally formed and funded must apply quasi-cy pres principles in making its determination. In Alco, the Court was reviewing the decision in a proceeding under Not-For-Profit Corporation Law 804 wherein a type B not-for-profit corporation obtained an amendment to its certificate changing its corporate purposes without the approving court having applied the doctrine of quasi cy pres in its determination. The Court of Appeals held that in an application under Not-For-Profit Corporation Law 804, the provisions of the first sentence of Not-For-Profit Corporation Law 1005 (a) (3) (A) must be applied using the quasi-cy pres concept of "engaged in activities substantially similar to those of the dissolved corporation," rather than the customary cy pres standard of "will most effectively accomplish its general purposes."