As the problems persist between Schmidt and Smith, Smith resigned the board as he felt upset as his decision was not much supported by the board members. The board approved an amount of $5 million for the construction of new building which was under pledge by Smith and his wife. The smiths disappeared and missed the complete payments which was pledged to the museum for the construction of new building. But problems arrived when Smith left museum and went away depending upon the pledge by Smith.

The Financial Accounting Standards Board (FASB) made new policy that all the non profit organizations had to record pledges as their income. Usually the procedure was to not record the pledges until the payment of money is made by the donors. This went really bad when the museum board reports that the museum was not able to pay the remaining fund for the newly created facility. Several alternatives were proposed by various board members and also the discussion of taking legal actions against Smith's were also discusses.

1: What alternative approaches could Peggy Fischer use to collect the unfulfilled pledge?

2: Should Fischer involve the board in further discussions leading to a decision about whether or not to file a lawsuit? Or should she formulate a recommendation on her own for the board's next meeting?

3: Do you think the museum should sue the Smiths? Why or why not?