On Tuesday, the Indiana Attorney General’s Office gave the Humane Society of Indianapolis (HSI) a tentative green light for using a restricted trust as collateral for a $1.7 million line of credit (see “Financial Disclosure,” Dispatch, May 5-12, 2004). The parties reached the agreement at a pre-trial conference.

HSI can move forward with their request, provided that a co-trustee, First Trust Indiana, is immediately appointed. Upon appointment, First Trust Indiana would be required to make a recommendation whether to use the $3.4 million Mary Crume Powell Trust as collateral, propose a repayment schedule for the line of credit and provide amended accounting of the Crume Trust assets.

The group Move to Act along with Alliance for Responsible Pet Ownership, Inc., Home for Friendless Animals, Inc., Southside Animal Shelter, Inc. and Spay-Neuter Services of Indiana, Inc. had requested standing in this case. They argued that if HSI’s plan to use trust assets for funding failed, other non-profit animal care organizations would be directly affected.

In an agreement reached late on Monday, Move to Act voluntarily agreed to withdraw their request for standing. Warren Patitz, founder of Move to Act, said, “We withdrew as a courtesy to the courts.” He added, “We felt it would waste the court’s time arguing [Move to Act’s] standing.”

The other groups are not withdrawing their requests. The Attorney General’s Office filed a motion on Tuesday to dismiss the groups’ request for standing. The motion stated that the parties “have not alleged that they have been injured or are in imminent danger of suffering injury,” and that “Only the attorney general may represent the public interest in the enforcement of public charitable trusts.” Stacey Schneider, press secretary for the attorney general, said, “Our first priority with public charitable trust assets is to determine whether or not and how much of trust assets could be put at risk.”

Patitz said, “If the Humane Society fails, the other groups would absorb the fallout.” He added, “Move to Act withdrawing doesn’t affect our argument for standing.”

The request to use the Crume trust as collateral for a line of credit would be the second such use of a trust by HSI. Last year, HSI used the Stokes Charitable Trust as collateral for a $700,000 credit line. That credit line was recently increased to $900,000.

The lines of credit are part of a three-year financial recovery plan by the Humane Society that included decreasing expenses and focused fund-raising efforts. Six months into the plan, HSI is 3 percent under budget on expenses and $286,000 ahead of fund-raising projections. According to Martha Boden, executive director of the Humane Society, “Our plan is to no longer be dependent on the lines of credit by 2006.”