Attorney: Ramsey 'deserves' to negotiate exit deal with Universi - WDRB 41 Louisville News

Attorney: Ramsey 'deserves' to negotiate exit deal with University of Louisville Foundation

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University of Louisville Foundation President James Ramsey, July 28, 2016 University of Louisville Foundation President James Ramsey, July 28, 2016

LOUISVILLE, Ky. (WDRB) --  Former University of Louisville President James Ramsey “deserves” to negotiate the terms of his departure as president of the school’s foundation and would like to continue leading the nonprofit organization until Jan. 1, 2017, according to Ramsey’s attorney.

When he resigned as U of L president on July 27, Ramsey “was told” he would get to negotiate “the timing and terms of his departure” as chief executive of the foundation, attorney Steve Pence wrote in an email Tuesday.

“We hope the Foundation will abide by that,” Pence wrote to foundation attorney David Saffer.

WDRB obtained a copy of Pence’s email, which was distributed to the foundation’s Board of Directors at Saffer’s direction.

Pence said Junior Bridgeman, who was chairman of the U of L Board of Trustees when Ramsey reached a $690,000 deal to leave the university, told Ramsey the foundation would negotiate his departure from that organization.

Bridgeman's assistant said he was unavailable for comment on Thursday.

Ramsey’s employment with the foundation terminates if he resigns as U of L president, according to Ramsey’s foundation contract.

But the foundation needs to provide Ramsey notice of the termination, which it has not. It would owe Ramsey nothing upon his firing, according to the contract.

In an interview with WDRB on July 28, Ramsey acknowledged that he can be fired from the foundation at any time, but said he would like to continue “if the foundation will have me.”

Acting U of L President Neville Pinto said in an email Monday that the foundation board – of which Pinto is now a member – should go ahead and fire Ramsey without any severance.

The foundation’s executive committee had planned to meet on Monday – a federal holiday – and discuss an exit agreement for Ramsey, but the meeting was canceled.

U of L Board of Trustees Chairman Larry Benz – who also sits on the foundation board – warned in a letter sent before the meeting that the “university’s position” is that the foundation would breach its fiduciary duty to U of L by paying Ramsey any additional money.

In the email Tuesday, Pence said Benz is “clearly wrong” and that his statement “wrongfully interferes with Dr. Ramsey’s contract with the foundation.”

Meanwhile, the Benz-led Board of Trustees has called a special meeting Friday to discuss proposed or pending litigation. It’s unclear if the meeting is related to the situation with Ramsey’s foundation employment. Benz declined to comment.

Pence added that an immediate dismissal of Ramsey from the foundation job would make it harder to recruit his replacement.

“It seems to me that the Foundation will have a very tough time drawing a qualified new President when it simply ousts the current President with no transition,” Pence said.

But all this becomes a “non-issue” if Ramsey is allowed to stay on the job until Jan. 1, Pence said.

The email does not say why Ramsey wants to stay until that date, and Pence did not immediately return a call for comment.

But as WDRB reported in July, Ramsey is in line to receive an extra payment from the foundation – estimated at $450,000 – if he remains employed on Jan. 1.

The additional payment is the result of a subtle tweak in Ramsey’s deferred compensation plan, which was approved by three of the foundation’s 15 board members in a five-minute meeting in 2014.

Ramsey has long received the vast majority of his compensation from the foundation instead of the university. 

It's a complex package that includes a base salary of about $300,000, bonuses, deferred compensation, insurance and long-term care benefits and special payments called “gross-ups” aimed at making much of his pay effectively free of income taxes by Louisville Metro, the state and the federal government.

On its tax forms, the foundation listed Ramsey's total compensation as $3.2 million in 2012; $1.8 million in 2013 and $2.8 million in 2014, the latest available years.

Here is the full text of Pence’s email:

David,

I've been provided a copy (or a draft) of Larry Benz's September 5, 2016 letter to Dr. Hughes.  I know you are reviewing this letter in a broader scope, but I'd like to point out of couple of things on Dr. Ramsey's behalf.

First, Benz is wrong in saying that "the continued payment by the Foundation of any money . . . to Dr. Ramsey . . . is not proper as it is not a use of money that benefits the University".   This is clearly wrong and, in my opinion, wrongfully interferes with Dr. Ramsey's contract with the Foundation.  Dr. Ramsey remains President of the Foundation.  In fact, he is at work today.  It is for the Foundation - not the UL Board of Trustees or its Chairman - to determine when Dr. Ramsey will depart from that position.  But until that time, Dr. Ramsey is entitled to be paid.

Second, Benz's assertion that paying Dr. Ramsey anything in connection with his resignation is a breach of fiduciary duty to the Foundation similarly interferes with Dr. Ramsey's and the Foundation's right to negotiate the terms of his departure.  The University of Louisville routinely negotiates a settlement and release of claims with individuals who elect to resign.  And they are wise to do so.  Why should the Foundation be different?  Both entities hold funds for the benefit of the University.

The legitimacy of the UL Board chaired by Larry Benz is questionable.   Dr. Ramsey was told by Junior Bridgeman, Chairman of the previous UL Board (that accepted his resignation as President of the University), that he (Dr. Ramsey) and the Foundation would negotiate the timing and terms of his departure from the Foundation.  We hope the Foundation will abide by that.

Finally, Dr. Ramsey prefers - and in my opinion deserves - to negotiate the terms of his departure from the Foundation. It seems to me that the Foundation will have a very tough time drawing a qualified new President when it simply ousts the current President with no transition. But as I have mentioned before, all this could be a non-issue by allowing Dr. Ramsey to simply resign effective January 1, 2017.

Thanks for your consideration. Please feel free to call me anytime. I look forward to hearing from you.

Steve

 Copyright 2016 WDRB News. All rights reserved.

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