March 7, 2011; Source: New York Times | According to the New York Times and a Smile Train press release, Smile Train and Operation Smile have called off their merger. In a recent article for the Times, Strom characterized the merger as a putsch that would have installed Charles Wang, the Chairman of Smile Train and instigator of the move, as the controlling decision maker over a “legacy fund” of $100 million or more.

The announcement of the merger was met by a storm of protest, involving board members, donors, and Smile Train’s entire medical advisory board. The attorney general was contacted by former Smile Train board members to investigate and an online petition was signed by scores of furious donors asking the AG to reject the merger. The petition also revealed that Smile Train Boards in Italy, Netherlands, UK, and Canada all voted unanimously against the merger.

Strom now reports that plans have been in the works since last Wednesday to announce that the merger is off, but collateral damage, according to documents acquired by Strom, may be high. From the Times:

A draft of frequently asked questions poses this one: ‘Why has the merger been called off?’ It suggests this answer: ‘Over the last three weeks, Smile Train has had to spend too much time dealing with false accusations, allegations and theft of our donor records. This gave us great concern that the organization was irreparably harmed.’

This situation, on its surface, is one of the most obvious and public examples we have ever seen of what appears to be a badly mismanaged merger process – one that ends up looking more like a failed coup – and the whole mess could cost the organizations and those they serve very dearly.—Ruth McCambridge