The longstanding tussle over the ownership of the New Orleans Baptist Theological Seminary (NOBTS) was resolved in part during a closed-door executive session at the seminary campus, October 13, 2004. The trustees of the NOBTS approved the two motions concerning the sole membership of the seminary as requested by the Southern Baptist Convention (SBC)’s delegates earlier this year, and essentially providing the Convention the full ownership to the seminary without the liabilities.
Sole membership is a legal mechanism that allows a parent organization to establish ownership over a subordinate entity while setting limits to the parent entity’s control and liability.
The sole membership model makes the SBC the single controlling member of the seminary corporation and outlines the specific rights entitled. The model prevents the seminary, as well as all other subordinate SBC entities, from “arbitrarily” acting to distance itself from the denomination, as some state convention entities have done in the past.
Under the sole membership model, the convention holds the right: to determine the qualification of trustees; to determine the term of office for trustees; to determine the number of trustees; to elect and remove trustees by vote of messengers; to "approve an amendment of the articles of incorporation adopted by the board of trustees but to refrain from exercising any right to unilaterally amend the articles"; to approve any merger, consolidation or dissolution or change in the seminary's state of incorporation; to approve the sale, lease or disposition of seminary assets; to approve the establishment of any seminary subsidiary on the acquisition of the same; and to be free from any assessment or the levy of dues.
According to the Executive Committee leaders, these rights are not new; the sole membership model is a way of specifying them legally.
Prior to this week, all other convention entities, with the exception of the NOBTS, agreed to abide by the sole membership model, and have provided exclusive ownership to the SBC.
Last fall, after an extensive study of the issue, the NOBTS trustees declined to adopt “sole membership model,” thus sparking a wide ranging debate within the SBC leadership. The trustee argued that sole membership could be used by the SBC’s executive committee to exert “undue authority” over the school, and could unintentionally increase liability for the convention itself. However, the executive committee member asserted such worries were unfounded, since the sole membership model would be the best way to strengthen the convention’s liability protection.
Jim Guenther, the SBC’s attorney for over 40 years, agreed with the executive committee, saying that liability would not increase through the sole membership model.
"In these lawsuits against the convention, we try to show the courts what rights we don't have," Guenther said. "This will not increase the SBC liability because, for example, by being able to show the court that since the SBC did not hire the bus driver who wrecked the bus and killed the people, the SBC did not hire the faculty member who slandered somebody, the SBC did not control and supervise the cafeteria in which the people got poisoned, the SBC did not maintain the boiler that exploded and killed the people in the dormitory, it is not liable.
"Whatever suits come in the future are going to come because of the negligence of somebody, and the SBC does not control any 'somebodies' at New Orleans Seminary. The SBC only elects the trustees, and the trustees control all these programs. So, by showing the court that the SBC doesn't control those things, it causes the court to say, 'Well, since you don't control it, you're not liable.'"
The NOBTS trustees ultimately succeeded to the executive committee’s request, allowing the convention to hold sole membership authority over the seminary.
"The New Orleans Baptist Theological Seminary Board of Trustees move[s] to propose to the Southern Baptist Convention the amendment to our charter requested by the convention in Indianapolis, Indiana in 2004 regarding sole membership, as outlined by the Executive Committee of the Southern Baptist Convention, with the attached reservations regarding legal and polity concerns and possible minor language adjustments to which the Executive Committee of the Southern Baptist Convention would agree. We further move that the New Orleans Baptist Theological Seminary President explain the reservations to convention messengers at the Southern Baptist Convention in Nashville, Tennessee in 2005,” the Oct. 13 resolution read.
The trustees, however, placed one condition in allowing the change in ownership: seminary president Chuck Kelly must be given the chance to report the concerns regarding the sole membership model to the delegates of the 2005 annual SBC meeting, during which the delegates will decide the final outcome of the issue.
"That the reservations regarding the legal and polity concerns be referred to the New Orleans Baptist Theological Seminary Executive Committee and to the New Orleans Baptist Theological Seminary's legal counsel for further review with the final document being presented to the full Board before the April 2005 meeting,” the second motion read.
Kelly explained that the second motion was necessary since at this year’s convention, the seminary was not allowed to present an alternative to “sole membership” for the messengers to consider.
Kelley again expressed his polity concerns that the sole membership change eventually could lead to an unhealthy consolidation of power by the Executive Committee over the convention agencies. He said that fear has been fed by the way the process has been handled with the seminary.
"If the Executive Committee staff would have said, 'Show us an alternative proposal,'" he noted. "If they had said, 'Well, if you want to present an alternative to the SBC, go ahead. We'll tell them why we don't like it. You tell them why you like it. Let's let the messengers decide.'
"But, as you heard (from the SBC attorney) they weren't sure what kind of proposal we were going to make," Kelley continued. "They wanted to be sure it was a proposal they controlled, so they literally took action to prevent us from putting a proposal before the messengers that they might not like. Well, I think that's a decision for the messengers, not the Executive Committee, because we are subject to the convention messengers and so should they be."
Nonetheless, Guenther – who was not allowed to attend the trustee’s closed door session – was optimistic about the overall direction of the seminary with regard to sole membership.
"I was pleased by what I understood to be the board's commitment to adopt a charter which the Executive Committee of the Southern Baptist Convention can recommend to the convention next June, as the convention requested," Guenther said. "I think it will serve everybody's interests to have closure on this issue and get on with the important ministry of the seminary."
Meanwhile, Kelly explained that whatever differences there may be between the seminary trustees and the SBC’s executive committee is due to the different view of the Louisiana state laws.
"We have a vast difference in our interpretation of Louisiana law from the Executive Committee," Kelley said. "So, the solution for that, if we in good conscience feel there are both legal concerns and polity concerns, is to fulfill the request of the convention, but to state with that request the reservations we have about this approach and then the messengers will make their decision."
"We are committed to the Baptist way," Kelley added. "The Baptist way is you work with the messengers of the SBC. That vote [in June] was taken, and we have responded to that vote in a way that I think every messenger to the SBC will say 'OK, they did what we asked them to do,' and the Executive Committee will have the proposal that they wanted from us with the reservations stated. It will not be sprung on the convention at the last moment.
"You know, there are no secrets out there; we like to keep everything on the table, so as soon as our [NOBTS trustee] executive committee has had a chance to review the written statement, it will be released with the document, not only to the [SBC] Executive Committee, but to all Baptist state papers and put on our website long before the convention takes place next June."
Kelly said he expects the final document to be ready for presentation by December.
Augie Boto, general counsel and vice president for convention policy with the SBC Executive Committee, said he hopes the document will surely be prepared on time, so the Committee would have enough time to review it before passing it on to the 2005 delegates.
"When we receive the documents and explanatory information suggested by the motions they adopted, we will not delay in providing a thoughtful response," he said.
"I certainly hope we will receive the information soon enough to permit resolving any differences over the next month and a half. That would permit the seminary's executive committee to approve an amended charter in their December meeting, and the SBC's Executive Committee to approve its language in February, thus setting the stage for action by the convention messengers in June.”