|[September 09, 2013]
Fluet Huber + Hoang Helps Non-Profit Prevail Against California Attorney General
WOODBRIDGE, Va. --(Business Wire)--
In August 2012, California Attorney General (AG) Kamala Harris launched
an all-out legal and media assault on the nationally known non-profit
"Help Hospitalized Veterans" (HHV). In a lawsuit and on national
television, Harris accused HHV directors and officers of breaching their
fiduciary duties, earning excessive pay, and "lining their pockets" by
engaging in self-dealing transactions.
In addition to seeking millions of dollars in fines against those
officers and directors, Harris sought to put HHV into receivership and
to remove an all-volunteer board of directors comprised of former senior
Veterans Administration officials, disabled veterans, and retired senior
Facing the California Attorney General's office in a fight for its very
existence, HHV turned to the legal team at Fluet Huber + Hoang (FH+H).
In short order, FH+H exposed numerous flaws in the state's five-year
investigation into HHV, forced the powerful AG to retreat from many of
her erroneous allegations, and secured a settlement highly favorable to
HHV and its directors.
Under terms of the settlement, which was reached one day before the
scheduled trial date in May 2013 and announced Friday, HHV and its
current directors paid no civil penalties or fines. HHV also recouped
$2.5 million as a result of the litigation.
"In the course of this litigation, HHV was totally vindicated and the
base allegations against the company and its current directors were
completely refuted," said Hugh P. Quinn, who served as lead litigation
counsel and is currently Chair of both FH+H's Litigation +
Investigations Practice Group and its Non-Profit + Charities Practice
Group. He was assisted by FH+H litigators Jack White, J. C. Estevez, Tim
Aiken, and Jill Helwi.
"As a result of our work, HHV walks away independent, intact, and
intensely focused on continuing its 40-year-old charitable mission of
providing wounded U.S. veterans with therapeutic arts and crafts kits,"
Quinn said. "In addition, and equally important, HHV's Board remains in
control of the organization's future, with latitude to autonomously name
The settlement marks only the latest success for FH+H involving
litigation centered on complex corporate accounting methods and
corporate governance issues. The law firm again demonstrated its skill
at managing and navigating the politically charged corporate
investigations that are increasingly being brought by government
oversight boards and regulatory bodies.
In the course of defending HHV, the law firm yielded a wealth of
valuable lessons for nonprofit organizations nationwide, such as those
related to joint cost allocation under AICPA SOP 98-2. HHV's attempt to
comply with this complex accounting regulation came under attack by the
California Attorney General, but FH+H quickly disarmed the government's
"This case serves as the latest example of how, unfortunately, many
well-meaning and well-managed nonprofit organizations find themselves
under intense scrutiny and unnecessary litigation brought on by various
regulatory authorities," Quinn said. "It also demonstrates why areas
such as complex accounting issues, executive compensation and corporate
governance require particular attention so that nonprofits can focus on
their mission - not on needless litigation."
About Fluet Huber + Hoang PLLC
Fluet Huber + Hoang (FH+H) is a values-based law firm that serves as
advocate, counsel, and champion for clients worldwide. Started by one
lawyer in one office with one client, FH+H has rapidly grown to eight
practice groups - Business + Corporate, Administrative + Regulatory,
Mergers + Acquisitions, Litigation + Investigations, International Trade
+ Transactions, Employment + Labor, Government Contracts, Non-Profit +
Charities, and Trusts + Estates - that serve the needs of hundreds of
individuals and businesses. FH+H's attorneys include a former White
House lawyer, a former Supreme Court law clerk, two former federal
prosecutors, five combat Veterans, and six lawyers with security
clearances. For more information, visit http://www.fluetlaw.com.
About Help Hospitalized Veterans
Help Hospitalized Veterans' (HHV) primary mission is to provide armed
service and military veteran patients receiving care at federal, state
and commercial medical or nursing home care facilities with therapeutic
arts & crafts kits. HHV was founded in April 1971, about a year after a
group of concerned San Diegans visited with several Marines who had been
wounded in Vietnam while they were recuperating at the Balboa Naval
Hospital. For more information, visit http://hhv.org.
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