In a novel ruling, the New Jersey Appellate Division disagreed with legal advice given to a nonprofit club, instead finding that the club did not violate the New Jersey Nonprofit Corporation Act by allowing members to leave and recoup a higher amount of money than originally paid to join.

Steven Breitman joined the Atlantis Yacht Club, a nonprofit organization, for $7,500. When he went to withdraw as a member in 2015, he was eligible, under the club’s bylaws, to receive a redemption of the certificate of interest he received on joining. After Breitman joined the club, it raised its membership fee to $25,000. The club’s bylaws at the time authorized the payment of the new member’s fee minus a $5,000 capital assessment, leaving Breitman with a $20,000 redemption, according to the opinion.

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