Attorney Takes: Judy Berkman Writes About Helping a Client Secure A $1.2M Cy Pres Award

Representing Philadelphia Chinatown Development Corporation As Intervenor in Two Court Proceedings

A Win for the Philadelphia Chinatown Community

The property at 125 North 10th Street is a historically certified iconic building with a traditional Mandarin-style façade located in Philadelphia’s Chinatown. It was known as the Chinese Cultural center or the Chinese “Y”, because the founder wanted it to serve as a YMCA in the Chinatown community. The non-profit that owned the building had held Chinese banquets there, as well as programming for recent immigrants, seniors and youth.

John Chin, Executive Director of Philadelphia Chinatown Development Corporation, asked me to attend a meeting about the building’s fate, because a conservatorship action targeting the building as blighted had recently been filed with the Court. The Petitioner, Scioli Turco, Inc., sought to be appointed conservator by the Court to remediate the blight at the vacant property and sell it, in order to return the property to productive use under Pennsylvania’s Act 135 of 2007, known as the conservatorship law. I was happy to participate in the meeting because I had written a manual on how to use the conservatorship law

I was also happy to become involved because I had become immersed in helping PCDC fulfill its mission by attending weekly development team meetings, as one of PCDC’s lawyers, with PCDC’s staff, Board members, and consultants regarding the development of Crane Tower, a $75 million development at the corner of 10th and Vine Streets. The new 20 story building will include a community center that can be used for sports or banquets, a health clinic, a childcare center, and 150 apartments–a modern re-imagined version of the original Chinese Culture Center. The Crane Tower will open in the fall of 2019.

I initially represented PCDC as intervenor in the conservatorship case regarding the repairs to the property, and then again in the Orphans’ Court case that followed, to determine if Scioli Turco, Inc., serving as Trustee for the defunct non-profit owner, could sell the property to a buyer that would use all or a portion of the building for continued community use. I mustered up some old litigation experience to attend hearings, question and cross-examine witnesses, and draft extensive pleadings and legal arguments drawn on the depth of my knowledge of the conservatorship law. All that work, even coming back early from one Thanksgiving with family to spend a Sunday at the office, was worth it! The final Court Order terminating the conservatorship case adopted much of my legal reasoning regarding how the conservatorship law governed some of the conservator’s claimed expenses. In Orphans’ Court, my involvement helped limit the Trustee’s costs and fee, but eventually the property was sold on the open market for $1,801,000.

The final question in the case was how the Court should distribute the net proceeds of the sale, after payment of all the costs and fees from both the conservatorship case and the Orphans’ Court case. There is established law on the doctrine of cy pres governing how a Court should allocate funds from the sale of a defunct non-profit’s assets. To that end, I worked tirelessly with PCDC to assemble a narrative that demonstrates how PCDC’s programs paralleled the those offered by the Chinese Cultural Center during its most recent years of operation, as well as fulfill its original mission. I submitted PCDC’s comprehensive proposal of how it would use the cy pres funds to continue and expand its current programming, and a thick package of attached exhibits, to the Trustee and the Court to demonstrate why PCDC was the non-profit organization most closely aligned with the original purposes and geographic area of the defunct non-profit. The Trustee recommended that four non-profit organizations receive equal shares of the cy pres funds. PCDC brought in the Schnader law firm, which has expertise in the law of cy pres, to submit a memorandum of law and to represent PCDC at the court hearings. The Court held two days of hearings in December and February, and issued its opinion and decree on April 16, 2019. The Judge reviewed the testimony and documentary evidence in a lengthy thorough review of the law of cy pres as applied to the facts. PCDC is honored that the Judge awarded 96% of the funds to PCDC–over $1.2 million.

I am proud to have been able to help PCDC achieve its goal of being able to use the Cultural Center funds for programs that benefit the Philadelphia Chinatown residents, businesses, and visitors, and for programs in PCDC’s new Crane Tower’s community center!