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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndiana Attorney General Todd Rokita is seeking to dissolve a Noblesville Christian charity after his office claimed it discovered the organization has mishandled its assets for years and is seeking to sell its property at a steep discount.
The complaint, filed in the Hamilton County Superior Court on Friday, accuses Third Phase Inc. of violating the Indiana Nonprofit Corporations Act by mismanaging corporate assets and failing to continue carrying out its stated purpose of providing “respite and rehabilitation whenever possible” to individuals in need.
Sandra Van Den Berg, the director of Third Phase, did not respond to The Indiana Lawyer’s requests for comment.
Founded in November 1980 by the Rev. Ruth Thalman and the Rev. Betty Violette, Third Phase is Hamilton County’s only homeless shelter, according to the organization’s website.
According to the lawsuit, Third Phase has expanded in recent years, now providing shelter to individuals leaving incarceration and operating a food pantry and thrift store.
But the complaint alleges that the organization has been improperly managed for years.
After receiving complaints from Noblesville community members, the Office of the Attorney General, or OAG, opened an investigation and issued several Civil Investigative Demands – essentially civil subpoenas – seeking documents and information regarding Third Phase’s operations, finances and compliance with nonprofit regulations.
Through the investigation, the OAG said that between 2021 and 2025, Third Phase held no formal board meetings and reported having no employees for at least the past five years, except for Van Den Berg, who has been running Third Phase’s day-to-day operations since 2016.
Also according to the lawsuit, Third Phase reported that it does not have a formal annual budget for any of its initiatives, does not track costs and does not provide annual reports to its board of directors.
The organization’s food pantry has also been in decline, the complaint stated. In 2021 and 2023, Third Phase served 1,000 households, but in 2024, it served 740.
The OAG also alleges that Third Phase is seeking to sell its real property at well below market value, which the office says “falls short of its obligations to protect the assets of the nonprofit corporation.”
After receiving the Civil Investigative Demand, the complaint stated, Third Phase retained attorney Mario Massillamany, of Fishers-based Massillamany Jeter & Carson LLP.
According to the lawsuit, Third Phase board members met at Massillamany’s office in June 2025 to discuss how to proceed. Based on board meeting minutes, the members decided to begin making plans to wind down the organization. Third Phase has not formally dissolved or ceased operations as of April 2026, the lawsuit stated.
In February, the OAG says it received documents from Robert Miller, managing attorney at Charitable Allies, an organization representing Third Phase in the matter. The complaint stated that the provided documents included an appraisal report for Third Phase’s property – about 10 acres of land at 15755 Allisonville Road – as well as a partially signed purchase agreement that indicated the property would be sold to MJS Holdings LLC – whose sole member is Massillamany – for $350,000 at the end of this month.
Miller told The Lawyer on Monday that he is currently in communication with the OAG regarding the matter.
Massillamany told The Lawyer in a phone call on Monday that the purchase agreement’s $350,000 price tag was based on a 62-page appraisal conducted by Shaun Patterson of SJ Patterson Co. in November 2025.
According to the appraisal report – which Massillamany’s office provided The Lawyer on Monday – Third Phase’s property has not been updated in the last 15 years and has “significant” deferred maintenance issues.
“Without a significant investment in [terms] of money, the subject property will eventually reach the end of its economic life,” the report stated.
The report also stated that the property’s functional utility and overall livability are “somewhat diminished” due to the condition, but it remains usable and functional as a residence.
The report used a sales comparison analysis, taking into consideration other, similar properties, but adjustments were made to account for location, topography, floodplain limitations, utility availability and development potential.
“These adjusted values provide a range between approximately $193,700 and $430,250,” the report stated. “The subject site, with partial floodplain encumbrance, deferred site condition, and the need for demolition of existing improvements, warrants a conservative placement in the lower half of this range.”
The report states that the $350,000 estimate “represents the opinion of market value” as of Nov. 1, 2025.
But the OAG’s complaint argues that the most recent tax assessment for 2026 valued the property at $1,236,900 – with the land valued at $287,800 and improvements valued at $949,100.
But Massillamany says that, since the charitable organization is exempt from property taxes, a tax assessor has not physically evaluated the property in years. Massillamany also said he invited the AG’s office to tour the facility more than a week ago to see the poor living conditions that corresponded with the appraisal, but he said they did not.
According to the complaint, the OAG also commissioned an independent property appraisal, which estimated the property value at $1,007,000.
The OAG also suggested that Third Phase’s pending purchase agreement with Massillamany could constitute a conflict of interest and a violation of the Indiana Rules of Professional Conduct.
Massillamany, who is not a named defendant in the lawsuit, defended the agreement and his actions, saying that there was “nothing nefarious” going on.
Massillamany and his office maintain that he informed the OAG of the pending purchase weeks in advance, inquiring into what information he needed to provide the office to ensure the sale could move forward.
“After more than three weeks of silence, I reached out and made one thing clear: I would not move forward without their approval,” Massillamany told The Lawyer in a text message Tuesday. “That was before any lawsuit – and it never changed.”
An office spokesperson for Rokita told The Lawyer in a text message Tuesday that Massillamany never told the office he would hold the purchase until it was greenlit.
“He is attempting to cover his tracks after being caught trying to personally and unethically benefit from the low-ball sale of his client’s $1 million asset for roughly one-third of its value,” the spokesperson said.
According to Indiana Code § 23-17-22-5, a dissolved corporation must preserve, protect and transfer its assets, as provided in or authorized by the corporation’s bylaws. If no such disposal provision has been made in the corporation’s bylaws – which the OAG argues in its complaint is the case for Third Phase – then the corporation must direct its assets to another 501(c)(3) organization.
“The Office of the Attorney General filed suit specifically to stop the real estate sale from proceeding and to preserve the organization’s assets,” the spokesperson said Tuesday.
But Massillamany asserts that the lawsuit was rather a “political decision” based on his years of criticizing the attorney general.
“The Indiana Attorney General didn’t just block a real estate transaction,” Massillamany said. “He blocked Hamilton County’s first male sober living facility,” which he says is what he planned to turn the property into after purchasing it.
And because of the legal action, Massillamany says the community “pays the price.”
The OAG now requests the court to dissolve Third Phase, appoint a qualified receiver to take control of Third Phase’s financial assets to ensure they are distributed in a manner consistent with Indiana law, and replace the current board members with an interim board.
When asked whether the office will file separate charges against Massillamany or MJS Holdings, an office spokesperson said the office’s primary intentions at this time are to “negotiate an agreed termination of that proposed transaction.”
The case is State of Indiana v. Third Phase Inc. (29D05-2604-PL-005119).
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