LCMS Commission on Constitutional Matters — Minutes St. Louis, Missouri — March 30, 2023, Page 4

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a right to or access to (particularly in connection with the dissolution provisions discussed below).
Such irrevocable changing of the character of assets is more akin to creation of a new synodwide
corporate entity rather than an instrumentality of LCEF. It is the commission’s understanding from
the memorandum accompanying the request that LCEF would principally, aside from minimal
inputs to facilitate basic operations of CanCorp, make loans to CanCorp, rather than contributing
assets irrevocably to CanCorp as its sole member. Such loan structure would allow LCEF to retain
rights to such assets (since they would contractually need to be repaid). If this structure is used, the
commission does not think it would cause issues with allowing this arrangement to move forward.
However, the commission would like to see such a restriction either in CanCorp’s bylaws or in
LCEF’s bylaws.
CanCorp Special Provision (g) is in conflict with Bylaw 1.5.3.6 (b)(2). As a corporation formed by
an agency, either (1) CanCorp’s governing documents need to include that upon dissolution its
assets go to LCEF (as the parent agency) or to the Synod if LCEF is not then in existence or (2)
LCEF must obtain Synod Board of Directors permission to exclude or modify such dissolution
provisions. Unless and until LCEF obtains such permission from the Board of Directors, CanCorp
Special Provision (g) would need to be revised to comport with option (1) in the preceding sentence.
Similarly, Bylaw 1.5.3.6 (a) provides that CanCorp’s governing documents must either (1) include
provisions that its governing documents are subject to the provisions of the Constitution, the
Bylaws and resolutions of Synod in convention, or (2) LCEF must obtain Synod Board of Directors
permission to exclude or modify such provisions. Unless and until LCEF obtains such permission
from the Board of Directors, CanCorp’s articles would need to be revised to comport with option
(1) in the preceding sentence.

Review of Proposed Bylaws
With respect to the proposed bylaws, the commission noted the following:
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For CanCorp Bylaw 2.01, similar to the discussion above regarding the articles, either (1) CanCorp
Bylaw 2.01 must be revised to delete the introductory clause thereof (starting with “To the extent
permissible…”), or (2) LCEF must obtain Synod Board of Directors permission to exclude or
modify such provisions. In the memorandum accompanying its request, LCEF argues that a clause
such as the introductory clause is inherent in all statements of subordination, whether expressly
included or not. This argument proves too much and if followed, would render the final paragraph
of Bylaw 1.5.3.6 a nullity, which is an approach the commission simply cannot accept. The intent
of Bylaw 1.5.3.6 is that an agency’s governing documents contain these provisions in unqualified
language. Either this must be done, or the Board of Directors must be petitioned for an exception.
CanCorp Bylaw 3.01 provides for the appointment of additional members by the membership.
LCEF has assured the commission that LCEF, which is intended to be the sole member shortly
after revision of the documents, intends to appoint no further members. The purpose for this
allowance of further appointments is therefore unclear and contrary to Synod BOD Policy 6.12.1.3
(b), which allows for no further membership beyond the forming entity as the “sole member.”
For CanCorp Bylaw Articles 4, 5, and 6, as discussed in the opinion relating to Question 1 above,
an agency cannot use a subsidiary to circumvent the requirements of the Bylaws. Were CanCorp
to be managed by its sole member, LCEF, then requirements under the Bylaws related to an
agency’s board would not be applicable (since there would not be one, and any action taken by the
subsidiary would need to be directed by the agency, which would act through its governing
documents in accordance with the Bylaws). However, having chosen to include a board here, then
the requirements of Bylaws related to an agency’s (and specifically, LCEF’s) board cannot be
avoided. With that understanding, there are a number of provisions in the Bylaws that would need
to be addressed in CanCorp’s Bylaws:
o Bylaw 3.6.4.3 provides that three directors of the LCEF board shall be elected by Synod in
convention and include one ordained or commissioned minister and two laypersons, the
CCM Minutes – March 30, 2023 – Page 130