Pillsbury Trial Victory Helps Athens College Preserve Unique Joint Governance Structure

Pillsbury has earned an important victory after a three-week bench trial on behalf of The Trustees of Athens College in Greece (the Trustees) in a decade-long dispute regarding the division of corporate governance powers between it and the Hellenic American Educational Foundation (the HAEF). The decision was rendered by Justice Jeffrey K. Oing of the Commercial Division of the Supreme Court of the State of New York (New York County) on November 14.

Athens College, a private K-12 school located in Athens, Greece, is one of the most prestigious private schools in Europe. The founders of the 90-year-old institution adopted bylaws calling for corporate governance powers to be shared among two boards—one Greek (the board of directors of the HAEF), and one American (the Trustees)—and also emphasizing that it would be a meritocratic institution that would allow Greek children without means to obtain the same education as privileged Greek children.

In 2007, the Greek board purported to terminate its relationship with the American board, and sued the Trustees for a declaration that the termination was valid. The Greek board also sought a declaration that it should be given control over the substantial endowment raised and administered by the Trustees. The trial court initially ruled in favor of the Greek board, terminating the parties' relationship and ordering the endowment transferred to Greece.

The Trustees then retained Pillsbury to handle Athens College’s appeal of the decision. After Pillsbury partner Leo Milonas obtained a reversal of the trial court decision, in which the appellate court found that disputed issues of fact existed that needed to be resolved at trial, he teamed with partner Ed Flanders (lead trial counsel) and associate Josh Schlenger to try a three-week bench trial. On November 14, Justice Oing issued his decision and order, declaring the HAEF’s 2007 termination notice to be “invalid, ineffectual and unenforceable” and that the school’s endowment funds “shall remain in the custody of the Trustees.” In so doing, the court also made important credibility determinations, rejecting the entire trial testimony of the HAEF’s main witness, the chairman of the Greek board, as “completely incredible.”

“This is an important victory for our client and, more importantly, the students of Athens College,” said Milonas. “With this conflict now settled—and the pending establishment of new by-laws as ordered by the court—all parties involved can get back to upholding the school’s long-held tradition of providing a world-class, bicultural education to Greek children, including those without the means to afford it.”