Legal Question in Business Law in Maryland

I live in a small town and serve on the committee for a yearly community festival. Our local fire dept. used to operate this festival. Three years ago they decided to give up the event and a group of people within the community stepped forward and took over. We established it into a Non-Profit Organization and operate on funds from fundraisers that we hold throughout the year, donations from our community, and a small donation from the Town Council that is set aside for this event. The fire dept. gave us $1,000 to start and since then they have had no participation in it. Various organizations within our community are sponsors of different events and activities but the vast majority of the costs for the event is out of our fund. Since the event is thriving and is now bringing in money, the Fire Dept. now wants the operation of the festival back, is trying to discredit the members as being dishonest and has brought this to our Town Council and is demanding to see our financial statements and for control of the event. Our books are clean and we have nothing to hide but we find it outrageous that we have raised this money and now they want it. Since we started with the $1,000 from the Fire Dept. and small donations from the town council, but are now a private Non-profit Organization, legally can they demand our financial statements and control of the festival along with our funds that we have raised? If this should go further than our Town Council meeting would they even have a case?


Asked on 9/15/10, 11:32 am

1 Answer from Attorneys
Phillip M. Cook Cook Legal Services, LLC

Unless the non-profit signed some type of agreement with the fire dept (for instance, that you would open your books and records/return control of the event to the fire dept upon request in exchange for that original $1000), I don't see a situation where the fire department has a legal right to demand anything. They certainly have no right to look into your books and records, especially if this is a private non-profit company. And I seriously doubt that they have the authority to take back control of the event.

With that said, the fire department may make your life miserable if you do not include them in this event. In other words, do you have to obtain a permit every year to hold the event? Is fire dept approval a necessary prerequisite for that permit? Do you see where I'm going with this?

Best of luck.******The above is for informational purposes only and does not create an attorney-client privilege.*******

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Answered on 9/21/10, 5:12 am


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