Recent Settlement Highlights Charity’s Duties in Commercial Co-Ventures

Recently, an Agreed Final Judgment was entered in Tennessee state court following an action by the Tennessee Attorney General (in conjunction with the AGs of 16 other states) against a TN charity concerning issues raised over a commercial co-venture program involving donations for teddy bears purchased to provide care packages to servicemembers. Facts: The charity, Operation Troup Aid, Inc. (OTA), engaged in a commercial co-venture with Harris Originals of NY, Inc. and related companies, collectively known as Harris Jewelry, which operates retail jewelry chain stores. There was no commercial co-venture agreement between the parties. Harris Jewelry created a program called “Operation Teddy Bear” in which its stores sold teddy bears in military uniform.  For each bear sold a specific dollar amount was donated to OTA for the express purpose of sending care packages to servicemembers. OTA did not undertake any oversight of the program, never requested an…

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