While there is a series of unfortunate events that occurred to NHF several years ago, the “news” stories and blogs found on the web are blatantly misleading to completely false. Dr. J.T. Dock Houk
would like to set forth some of
the history of this charity.
In 2006, NHF was sued by a
family in Texas over an insurance policy the family donated to NHF. The
Mancillas family lived in Texas and retained a lawyer known for attacking
companies with “deep pockets”, meaning companies with large asset base and
insurance. NHF had to appear in the Brownsville Texas courts to fight this
case. NHF tried to get its insurance company, Philadelphia Indemnity
Insurance Company, to indemnify NHF in this case which was clearly a
covered claim. The insurance company declined. NHF made every effort
to resolve the case amicably, including making efforts to settle with the
Mancillas family, but they turned down all efforts. In the summer of 2008, the
court in Texas, presided by Judge Abel Limas, tried our case. (Note that the
Judge was voted into office, that the Mancillas family were personal friends
with the judge, and that critical evidence in our case was
suppressed.) NHF lost and a very heavy judgment was levied.
With the Mancillas
case, NHF needed to post a bond to appeal the Texas judgment in the
amount of the judgment which was $7 million dollars. Bond insurers would not
allow NHF to secure a bond with stocks because of the volatility in
the markets at that time – stocks were fluctuating by thousands of points
daily. The insurers required cash. NHF had to liquidate millions of
its stock accounts very quickly to post the bond. This resulted in having to
file for bankruptcy.
NHF reorganized in the fall of
2009, paid off the annuitants and other creditors, unfortunately with donated
funds, because it was required to by the bankruptcy courts to do so. Since the
fall of 2009, NHF has restored nearly $2M in lost funds to donor’s
accounts from its own assets held in more illiquid form. There was no court
mandate to do this, NHF has voluntarily done so.
In 2011, NHF sued its
insurance company for failure to cover and for bad faith in denying coverage in
the Mancillas case. NHF won a settlement from Philadelphia and has
used those funds to restore even further its donor advised funds, to pay tremendous
legal bills in the bankruptcy and ensuing insurance.