9/26/2013 11:58:00 AM,
Philip A. Janquart
(CN) - Alpha Omicron Pi Fraternity cannot take over a sorority house belonging to a chapter with nearly century-old roots at University of Minnesota, a federal judge ruled.
Alpha Omicron Pi is a nonprofit women's fraternity established in 1897 by four women at Columbia University in New York. Today, it is headquartered in Brentwood, Tenn., and has 190 collegiate chapters in the U.S. and Canada, according to its website.
One of those chapters is located at the University of Minnesota where a tug-of-war for control over a sorority house has played out since 2010. Court documents on this fight abbreviate Alpha Omicron Pi's name as AOII, with the last two letters mimicking the look of the Greek letter pi.
Facing off against AOII is Tau Inc., which built and has owned the sorority house in the 1930s. Tau is the affiliated chapter corporation of a chapter AOII started at the University of Minnesota in 1912. It was originally named Alpha Omicron Pi Society of Minnesota, but changed its name to Tau of Alpha Omicron Pi in 1942 and then became Tau Inc. in October 2012.
Tau describes itself as a "stand-alone" Minnesota entity that is the "sole fee owner of the property and building," and that its affiliation with AOII stems from its own members who are also alumnae members of AOII International's Minnesota chapter, according to the complaint.
AOII International collegiate members have allegedly always leased the property and residential building that Tau purchased and built with funds it raised.
Tau says it has always managed its own properties, including collecting rents from individual collegiate members, but acquiesced "under duress" to a 2010 demand from AOII to relinquish control of all management activities. The fraternity then began to manage the property using property management services provided by Corporation Services and Bill Highway, according to the complaint.
Tau says AOII was setting them up for complete control and ownership of the building.
It claims that "defendants have unlawfully taken over Tau's corporate governance and finances, and are threatening to mortgage or sell Tau's real property," U.S. District Judge John Tunheim wrote, summarizing the allegations.
Tau filed suit
in December 2012 for a preliminary injunction to prevent AOII from swiping the property while the matter is settled in court.
Key to the issue are the competing bylaws of those entities, each claiming control of the property.
Tau's motion on several grounds Monday, emphasizing that AOII cannot simply make up a set of rules or bylaws that declares it owns property belonging to a legal entity.
"AOII has not cited, nor has the court found, any authority for the proposition that a corporation's bylaws alone can confer upon the corporation the right to control another entity," Tunheim said. "For example, if AOII's bylaws said that it has the right to control the Walt Disney Company, that provision would have no legal effect and would not be binding upon the Walt Disney Company."
Tau's attorney, Anh Le Kremer, welcomed that analogy and the Tunheim's decision. "I agree with that completely," she said in an interview.
AOII's attorney, John Harris in Nashville, Tenn., declined to comment.