University sorority loses federal case to own chapter house

Nicolas Hallett

A federal judge ruled that a University of Minnesota sorority does not own its chapter house becuase it says so in its bylaws, Courthouse News Service reported Thursday.

Alpha Omicron Pi, or AOII, attempted to seize the property from the "affiliated chapter corporation" known as Tau Inc., which built and owned the house since the 1930s.

In 2010, Tau Inc. says it gave into demands from AOII to relinquish control of all property management because it was put "under duress" by the womens fraternity's headquarters. The two entities have been locked in a lengthy legal battle ever since.

The Minnesota sorority's chapter president Sara Gottlieb said she was aware of the case but could not comment further.

U.S. District Judge John Tunheim held in favor of Tau Inc. on Monday in a preliminary injunction stating "[AOII has] unlawfully taken over Tau's corporate governance and finances, and are threatening to mortgage or sell Tau's real property."

The judge said the sorority's bylaws were not proof it had a right to control the estate and underscored his ruling with an example: "If AOII's bylaws said that it has the right to control the Walt Disney Company, that provision would have no legal effect and would not be binding upon the Walt Disney Company."