At a hearing on August 15th at Oakland County Circuit Court,  Judge Rae Lee Chabot dismissed the lawsuit Chabad Lubavitch of Michigan filed against the West Bloomfield Bais Chabad. After listening to oral arguments from lawyers for both parties, the Judge agreed with the lawyer for Bais Chabad that the statute of limitation has expired on the claim.

On June 21 the Detroit Jewish News reported:

On April 17, Chabad of Michigan filed suit in Oakland County Circuit Court seeking a declaration that it has controlling authority over the Sara and Morris Tugman Bais Chabad Torah Center of West Bloomfield (Torah Center).

The lawsuit alleged that several rabbinical tribunals have ruled that under the hierarchal system of the Chabad movement, title to the Torah Center’s real property should be held by its supervisory entity, Chabad of Michigan.

On the other side of the lawsuit are the defendants: the Torah Center, its Rabbi Elimelech Silberberg and its board of directors (in their official capacities only).

Attorney Todd R. Mendel of the Detroit law firm of Barris, Sott, Denn & Driker PLLC represent Bais Chabad while Chabad Lubavitch of Michigan is represented by attorney Norman C. Ankers of Honigman Miller Schwartz and Cohn LLP of Detroit.

On August 20, Chabad Lubavitch of Michigan issued the following statement:

Although we understood from the beginning that this complex case could require a process involving multiple steps through the legal system, we are disappointed that the case was dismissed by the Circuit Court on a procedural matter and that its fundamental issue has not yet been judged on its merits. That is why we are asking the Michigan Court of Appeals to consider this case.
It is important for the community to remember that Chabad Lubavich is an organization with a special mission to the Jewish community and has executed that mission successfully in Michigan for more than 50 years.
Our movement has a specific form of governance based on Jewish law and Lubavich tradition. This is imperative to the success of the movement, its future and its ability to work together in a cohesive manner. Any tampering with that system would undermine the structure of the movement.  At its core, this case is about following Jewish law, rules and rabbinical court decisions.
Throughout this case, the ownership and authority of Bais Chabad has been determined by numerous rabbinical bodies, based on Jewish law and Lubavitch tradition.  We sought action in the secular courts with full permission of the rabbinic courts and only because the rulings of the rabbinic courts were not followed.
As an example, here is a quote from one of the rabbinic rulings:

“ Concerning Congregation Bais Chabad Torah Center of West Bloomfield: According to the facts, it seems clear that the congregation was established by Chabad-Lubavitch of Michigan even before Rabbi Silberberg was appointed. Over the years, funds have been raised for the congregation using the name of Chabad-Lubavitch. If the institution had indeed been ‘independent,’ it is obvious that unless this had been concealed from Rabbi Shemtov, he would have stopped it immediately (just as he would stop any independent congregation in the city wanting to raise funds by using the name of Chabad-Lubavitch). Therefore there is no justification for transferring the aforementioned congregation from an institution within the framework of Chabad-Lubavitch to becoming “independent.” It makes no difference what was Rabbi Silberberg’s involvement in this, whether it was direct or indirect: Even if it was only in a manner of indirectly causing it to happen, one who is entrusted with taking care of anything or serving as a shaliach [emissary] to do anything is held liable even if he caused damage indirectly, as explained in Divrei Geonim, Klal 15, chapter 5, and Klal 95, chapter 30 – see there.             

Since (as noted) Rabbi Shemtov is the one who established the congregation (even before he appointed Rabbi Silberberg to his job), and one of Rabbi Silberberg functions when he accepted his appointment from Rabbi Shemtov was to develop the congregation, this [change in the congregation’s status] was in conflict with his duty, and contrary to the mission he accepted (and certainly contrary to the sacred desire of the Rebbe). Clearly, the act of transferring ownership of an institution belonging to the Rebbe to private individuals (and concealing this from Rabbi Shemtov), severing it from Chabad-Lubavitch, and making it independent, constitutes a most grave offense.             

(See Alter Rebbe’s Shulchan Aruch, Choshen Mishpat, Hilchos Mechira Umatana V’shaliach Va’apotropos (paragraph 17), that it is a shaliach’s duty to inform the one who sent him if he is unable to accomplish his mission; if he makes a change for his own benefit, he is considered dishonest.)”

We still hope that Bais Chabad and its Rabbi will change their direction and choose to abide by the rabbinical rulings. That would save additional money, heartache and division within the community.
It is not an option of Chabad Lubavitch of Michigan to walk away from this case and somehow grant independence to Bais Chabad, as that is a right not granted to our organization. Under Jewish law and Lubavich tradition, the director of this organization is entrusted by the Rebbe, of blessed memory, and the Lubavich movement as a custodian to build, protect and secure the success and future of the movement, its property and the funds that rightfully belong to the organization.
Because some have charged, via The Jewish News, that we plan to somehow take away Bais Chabad and displace its members, we reiterate what we wrote in our letter to the congregation on the day that Circuit Court litigation was filed:
“While this suit is going on, we encourage the members of Bais Chabad to continue to pray, attend services and study at Bais Chabad.  We do not wish this case to cause any disruptions in the operations of the Congregation.”
“It is our hope that after this situation is resolved with the authority of Chabad Lubavitch of Michigan rightfully established, that Bais Chabad will continue to grow as a place of Torah and chasidus in the community.  Chabad Lubavitch of Michigan will not, G-d forbid, interfere and will indeed be willing to help in facilitating the growth of the congregation.”