Settlement of a private foundation dispute: protect the board, beneficiaries and purpose

Before negotiations, prepare a claims matrix covering information requests, distribution claims, organ measures, damages, costs and pending proceedings. Each item should identify the holder, opposing party, evidence and potential implementation.

Not every family participant can act for the private foundation. The foundation board represents it under section 17 PSG. Beneficiaries may dispose only of their own rights. An advisory board or founder needs specific authority to participate in a binding decision.

The settlement should state a realistic objective such as restoring information, arranging payments, preserving organ capacity or ending a defined proceeding. General family peace matters, but is too vague as the only legal content.

Where a board member is personally affected by allegations, damages claims or remuneration, the settlement cannot be treated as a neutral routine matter. Participation, representation and quorum must be clarified before negotiations.

A settlement between the private foundation and a board member is a legal transaction. If there is no supervisory board, section 17(5) PSG may require approval by all other board members and the court. The Supreme Court measures approval against the interest and welfare of the foundation.

Indirect conflicts also require an independent factual and valuation base. Separate legal representation, an economic assessment or enhanced resolution records may be appropriate.

The board may not promise a performance that breaches the declaration or creditor protection. Long-term distribution promises, influence rights or organ appointments must be lawful and resolved by the competent body.

Statutory control rights cannot be contracted away without limit. A beneficiary may settle specific personal claims. The agreement cannot remove the legal organ scheme or the rights of absent persons without a proper basis.

The Supreme Court assesses important foundation measures by future functionality and secure pursuit of the purpose. Transition, cooperation and control therefore belong in the settlement review alongside money.

A settlement need not equal the maximum conceivable court outcome. The board may consider evidence risk, duration, costs, enforceability and the burden on the foundation. The assessment must be traceable from the perspective at the time.

The record includes facts, legal assessment, economic range, alternatives and conflicts. It explains why the chosen solution protects the purpose better than continued litigation or another settlement.

Implementation needs due dates, responsibility and evidence. This includes payments, documents, withdrawal of applications, organ handovers and tax implementation. The foundation advisory board may participate only within its actual powers.