Summary of Key Allegations: Pleading Filed on 12-22-25 in the Circuit Court of Essex County
The plaintiffs, seven members of the St. Margaret’s Board of Governors during the 2024-25 academic year, allege that the Church Schools in the Diocese of Virginia (CSDV) and its Trustees have violated their fiduciary duties and mismanaged the charitable trust established for the benefit of St. Margaret’s School, an all-girls Episcopal school in Tappahannock, Virginia. The key allegations include:
Unjust Closure of St. Margaret’s School: The CSDV announced the closure of St. Margaret’s School on July 10, 2025, despite the school having enrolled students, contracted faculty, sufficient staff, and funds to operate for the 2025-2026 academic year. The plaintiffs argue that this decision was not religious in nature but a calculated move to reallocate assets to other schools in the CSDV portfolio.
Breach of Trust with Donors: The CSDV solicited millions of dollars in charitable contributions specifically for St. Margaret’s School, which were held in trust for the school’s benefit. The plaintiffs claim that the school's closure violates the intended purpose of these donations.
Conflict of Interest: The plaintiffs allege that the CSDV Board of Trustees, many of whom are affiliated with other schools in the CSDV portfolio, acted with conflicts of interest. They claim that the closure of St. Margaret’s benefits other schools in the portfolio, which are now experiencing increased enrollment and financial windfalls.
Violation of Cy Pres Doctrine: The plaintiffs argue that the CSDV violated the cy pres doctrine, which requires that charitable trusts be amended to fulfill their original purpose as closely as possible when the original objective becomes impracticable. They claim that the closure of St. Margaret’s disregards this legal principle.
Failure to Act in Good Faith: The plaintiffs allege that the CSDV failed to act in good faith by changing the terms of the financial benchmark (the "Cash Test") for the 2025-2026 academic year after the school community had met the original fundraising goal. They also claim that the CSDV undermined the school’s ability to meet enrollment targets by prematurely announcing its potential closure.
Dissipation of Assets: The plaintiffs claim that the CSDV has taken actions to dissipate the school’s assets, including transferring buses and vehicles to other CSDV schools and cordoning off the school’s property, without providing information to the school’s governing bodies or interested parties.
Summary of What the Plaintiffs Are Asking For
The plaintiffs are seeking the following relief from the court:
Injunctive Relief:
Prevent the CSDV from dissipating or misusing the school’s assets, including its properties and funds.
Stop the CSDV from taking actions that would divert or waste funds intended for the school.
Preserve the school and its assets until a new operator can be identified to take over its operations.
Appointment of a Receiver or New Trustee:
Appoint a receiver or replacement trustee to manage the school and its assets.
Empower the receiver or trustee to operate the school, collect tuition, solicit donations, and seek licensing and accreditation.
Authorize the receiver or trustee to convey or lease the school to a nonprofit entity that will continue its original mission.
Void Closure Votes:
Declare any votes by the CSDV Board of Trustees to close the school as void due to conflicts of interest among the board members.
Liability for Asset Transfers:
Hold the CSDV liable for any assets transferred from the school after June 5, 2025.
General Relief:
Grant any other relief deemed just and proper by the court.
The plaintiffs argue that these measures are necessary to prevent irreparable harm to the school, its students, faculty, and donors, and to ensure that the charitable trust established for St. Margaret’s School fulfills its intended purpose.
Contact: Chap Petersen
Email: jcp@petersenfirm.com
Phone: 571-459-2512 (main)
