When Dan Maddox, a Nashville businessman, set up a foundation in 1968, he hoped it would benefit his beloved state and give youngsters the leg up in life he never had. What he couldn't foresee is that the foundation would be moved to Mississippi a few years after his death and its assets used to buy two minor-league sports teams and pay for chartered plane trips at the sole discretion of its president, the New York Times reports.

Now the Maddox Foundation and its president, Robin Grindstaff Costa, Maddox's longtime assistant, are at the center of a lawsuit brought by the state of Tennessee to force the foundation to return to its original home. The suit also has exposed some of the inner workings of the organization, casting doubt on the foundation's finances and offering a lesson in the potential pitfalls of even well-prepared estate plans.

Lawyers representing the foundation, which is now incorporated in Mississippi, argue that the move was legitimate, that Costa's trips were for foundation purposes, and that the sports teams — the Memphis RiverKings, a minor league hockey team, and the Xplorers, an arena football team — were planning to leave their home arena in Mississippi's DeSoto County, depriving the area of much-needed tax revenue. Tennessee contends that Maddox's assets, estimated to have been roughly $100 million at his death, were moved without the approval of the probate court to a state that allows a single director to make all decisions. What remains of those assets is unclear: in 1999, Costa valued the foundation at $175 million; a year later, the estimate had fallen to $139 million, and last summer Costa put their value at $76 million. According to lawyers for Tennessee, Costa has been paid more than $4 million since 1998 in her roles as the foundation's president and an executor of Maddox's estate.

"If the allegations are proven to be true, then this foundation has been turned into the private pocketbook of the individuals who run it," said Jeffrey A. Schoenblum, a law professor at Vanderbilt University and the foundation's adviser until 2001. Schoenblum, who helped Maddox plan his estate and advised the foundation immediately after Maddox's death in a boating accident in 1998, believes the move will be sustained. "But as for the administration of the foundation in recent years," he added, "if the allegations are true, I cannot see how anyone can justify what was done."

Still, the foundation, and Costa, have their supporters. According to former Mississippi governor Ronnie Musgrove, the foundation was instrumental in placing a computer in every Mississippi classroom. "The foundation put $1 million in and helped raise $28 million in total," Musgrove told the Times. "How can you criticize that?" It has also pledged a $10 million matching grant to help develop a community foundation in northwest Mississippi.

But nonprofit lawyers familiar with the case say the foundation and its activities are not receiving adequate oversight. "The person who should do something about this is the attorney general of Mississippi," said Evelyn Brody, a professor at the Chicago-Kent College of Law who specializes in nonprofit law. "They [foundation officials] could have their cake and eat it, too, if they would enforce more responsible use of these assets."