Corner Stone Funeral Chapel, Inc. v. MVMG, LLC

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Corner Stone Funeral Chapel, Inc. appealed a judgment ordering a receiver to transfer the assets of a cemetery business to MVMG, LLC, its competitor. Mountain View Memory Gardens & Mausoleum, Inc. owned a cemetery in Rainsville known as Mountain View Memory Gardens and Mausoleum. Jeanette Mince, the sole owner and officer of the corporation, died in 2008, leaving the corporation to her two daughters. Neither daughter was interested in operating the corporation, and they expressed an intention to disclaim any interest in it. In 2009, the Alabama Department of Insurance investigated the corporation's records and discovered that the corporation was in poor shape. The Department found that the corporation had underfunded certain trust funds required to be established by the Pre-need Act, that the corporation was insolvent, that the corporation had ceased doing business, and that the cemetery had effectively been abandoned. The Department found that the continued control of the cemetery by the corporation would be hazardous to pre-need-contract purchasers and beneficiaries in particular and to the people of Alabama in general. Based on the Department's findings, Jim Ridling (in his official capacity as the commissioner of the Department) filed a complaint against the corporation, seeking preliminary and permanent injunctions. Ridling also asked the trial court to appoint a receiver to take control of the corporation and eventually to liquidate and dissolve the corporation, subject to the trial court's supervision. During the receivership period, individuals owning plots and vaults in the cemetery formed the MVMG Mausoleum Association during the receivership period to preserve the cemetery. The receiver unsuccessfully attempted to find a buyer for the cemetery, and she eventually concluded that the cemetery was unmarketable. The receiver then recommended that the cemetery and the corporation's other assets be transferred to an entity that would both operate the cemetery and honor, either in whole or in part, the corporation's approximately 1,155 outstanding preneed contracts. Two entities presented proposals seeking the transfer of the assets, of which the cemetery is the main asset: Corner Stone and MVMG, LLC. The receiver recommended that the trial court accept Corner Stone's proposal. Following an ore tenus trial, the trial court disagreed with the receiver's recommendation and decided to accept the LLC's proposal. Corner Store appealed the trial court's decision. "We cannot say that the trial court exceeded its discretion in ordering the transfer of the corporation's assets to the LLC." Thus, the Supreme Court affirmed. View "Corner Stone Funeral Chapel, Inc. v. MVMG, LLC " on Justia Law