Henderson Mayor Melissa Elliott is the subject of a civil lawsuit filed this month concerning the sale of a property originally donated to her nonprofit organization, Gang Free Inc. The complaint alleges that a property gifted to the nonprofit was later transferred to Elliott personally and sold for $55,000, with the plaintiff questioning the whereabouts of the proceeds.
Key Takeaways
- Henderson Mayor Melissa Elliott has been named in a civil complaint regarding a real estate transaction.
- The lawsuit focuses on a property at 431 Charles Street, which was gifted to her nonprofit, Gang Free Inc., in 2017.
- After a series of transfers, the property was sold in 2024 for an estimated $55,000.
- The plaintiff, Natalie Butler, alleges the sale personally benefited the mayor instead of the nonprofit.
Details of the Civil Complaint
A civil complaint was officially served to Mayor Melissa Elliott in early October, initiating legal proceedings over allegations of improper handling of a real estate asset. The lawsuit was filed by Natalie Butler, who contends that the mayor personally profited from a property that was intended to support the mission of a local nonprofit.
The core of the legal challenge centers on the final sale of the property. While nonprofit organizations are permitted to sell assets, the funds generated from such sales are legally required to be used to further the organization's stated goals. In this case, the lawsuit claims the proceeds from the $55,000 sale did not benefit Gang Free Inc., whose purpose is to combat gang activity in Henderson.
Nonprofit Asset Management Rules
Under general nonprofit law, assets owned by a 501(c)(3) organization, such as real estate, are considered to be held in trust for charitable purposes. If an asset is sold, the revenue must be directed back into the organization's programs and operations. Diverting such funds for personal use can lead to significant legal and financial consequences.
A Timeline of Property Transfers
The legal dispute traces back to a series of property transfers documented in official deed books over a seven-year period. Understanding this timeline is central to the plaintiff's case against Mayor Elliott.
The Initial Donation
According to public records, the property located at 431 Charles Street was gifted to Gang Free Inc. in 2017. The donation was made by Crenshaw Investments, a now-dissolved company from Wake Forest that was operated by Clay Barrow at the time.
Barrow recalled that Mayor Elliott had approached him about finding a use for the property, though he did not remember a specific purpose being discussed. Following their conversation, he decided to donate the property to her nonprofit organization.
Subsequent Deed Changes
Several years after the initial donation, the property's ownership was transferred again. In 2022, records show that the property was moved from Gang Free Inc. to another entity, Melissa Elliott Ministries. This transfer was executed via a quitclaim deed by Jeanette Floyd, who was the Board Chair of Gang Free Inc. at the time.
The final transfers occurred in 2024. The property was first transferred from Melissa Elliott Ministries into Melissa Elliott's name personally. This transaction was recorded at 2:38 p.m. on the day of the sale.
From Personal Name to Sale in One Minute
Public records indicate that just one minute after the property was transferred into her personal name, Mayor Elliott sold it. The sale to Main Stream Capital Investments, a Kittrell-based company, was recorded at 2:39 p.m.
The $55,000 Sale and Legal Questions
The final sale price of the property is a key fact in the lawsuit. While the sale document itself may not list the price, the amount can be determined from the recorded excise tax. The transaction listed an excise tax of $110.
In North Carolina, the real estate excise tax is calculated at a rate of $1 for every $500 of the sale price. Based on this formula, a $110 tax payment corresponds to a sale price of $55,000. The lawsuit questions why this money was not directed to Gang Free Inc., the original recipient of the donated property.
"We're looking forward to our day in court, as well as an explanation," stated Boyd Sturges, the attorney representing the plaintiff, Natalie Butler. "Where is the money? Why transfer the deed that way?"
The plaintiff's argument is that by transferring the property into her own name before the sale, Mayor Elliott effectively deprived the nonprofit of assets that could have been used to fund its community-focused mission.
Next Steps in the Legal Process
Following the serving of the civil complaint, Mayor Elliott has a standard 30-day period to file a formal response to the allegations. Legal procedures allow for a potential request for an additional 30-day extension to prepare a defense.
The mayor's response will be the next significant development in the case, outlining her position on the series of transactions and the ultimate destination of the funds from the property sale. As of press time, Mayor Elliott had not responded to requests for comment regarding the lawsuit.
