LCMS Commission on Constitutional Matters — Minutes St. Louis, Missouri — September 8, 2026, Page 4

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An LLC is commonly used in real estate to provide liability and bankruptcy isolation, as well as to
provide clarity for a lending institution and a borrowing corporation, so that the two together can
finance a particular project on its own basis rather than evaluating and encumbering the complete
portfolio of properties and operations of the parent corporation.

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Documents treating of Synod agency property transactions, in particular university campuses, do
not seem explicitly to address the above. 2004 Res. 4-04, for example, echoing a similar 1998
directive of the Board of Directors, states “that each institution of higher education of the Synod
shall hold title to properties presently owned or at any time hereafter acquired by it subject to a
reversionary interest or possibility of a reverter in favor of the Synod in such form and stating such
conditions as shall be established by the Board of Directors of the Synod except as provided by
such Board.” Further, Board of Directors Policy section 6.3.3 sets forth, so far as the higher
education institutions of the Synod are concerned, the delegation of responsibility and retention of
authority regarding such property, Bylaw 3.3.4.7 [b–c]. In addition to Policy 6.3.3.3, which
implements the requirement of 2004 Res. 4-04, Policy 6.3.3.2 has that “each educational institution
holds the property it owns as the legal and record titleholder of the property, in trust for the Synod.
Property of the Synod held by its educational institutions shall be held/titled in the name of the
respective institution, except that securities may be registered in the name of a nominee.” While
interpretation of BOD policies does not fall within the commission’s responsibility, except to the
extent they might conflict with the Constitution, Bylaws, or resolutions of the Synod, these raise
questions for the commission about the holding of campus properties in particular.

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Any potential authorization of the named or a similar entity as a Special Purpose Entity (SPE, under
Bylaw 1.5.3.1 [b][1]) would seem, for the board’s due diligence, to have to take into account the
above and would be a significant departure from the well-accustomed mode of operation of the
Synod that university campuses are property of the Synod and managed as such, for example, under
Bylaw 3.3.4.7. The property held by an authorized SPE would not be property of the Synod (2026
Bylaw 1.2.1 [r]), though an “equity or ownership interest in such an entity that is held by…an
agency of the Synod…” would be. Nonetheless, the relationship of the Synod to the property in
question would, in such a structure, be very different than accustomed. (Nonetheless, the structure
could accommodate rights of reversion or reentry on such property, Bylaw 1.5.3 [b]).

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The commission does not here opine on whether it would be in harmony with the Constitution,
Bylaws, and resolutions of the Synod to use an SPE to hold campus property of a higher education
institution of the Synod. Some preliminary observations are made in this regard:
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Bylaw 1.5.3 requires that the SPE carry out “business functions beyond the unaided
capacity of [the university] that support, but do not themselves enter into, the purposes
outlined in Constitution Article III.” Presuming that the common purposes of an LLC in a
real estate transaction, as noted above, are part of those “business functions beyond the
unaided capacity” justifying utilization of the SPE, it would seem that the structure of the
LLC would need manifestly to be serving those (or some) such function, if property of the
Synod is to be committed to it consistent with the fiduciary responsibilities of those
involved.

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Cognizant of the Board of Directors’ ability to publish policies creating new categories of
SPE, for the named entity to fall under Bylaw 1.5.3 (b)(1), the related project would have
to involve, at least as a consultant, the Lutheran Church Extension Fund.

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The conversion of “property of the Synod” into “non-property of the Synod” inherent in
the investment of the property in an SPE raises—given the fiduciary duties of governing
boards for the property specifically stated in the Bylaws, some of which see below—
serious questions about and implications for the structure of the entity.
CCM Minutes – September 8, 2026 – Page 4