LOUISVILLE, Ky. (WDRB) -- The University of Louisville board of trustees voted Thursday to establish a "special litigation committee" to decide the biggest question hanging over board since June: whether to go to court over mismanagement of U of L's nonprofit foundation.
Trustees Chairman David Grissom said the board has to consider the costs of pursuing litigation, including extensive legal fees and continued reputational harm as the university begins to look for its next president, as well as the likelihood of being able to collect any favorable judgments.
"There are pros and cons of proceeding with litigation and if so, against whom," Grissom said. "That is what this committee is going to be challenged with ... deciding the best course of action to take in protecting the interests of the university."
A forensic investigation released June 8 concluded that, under former U of L President James Ramsey, the foundation depleted the university's endowment with excessive spending, including lavish compensation for administrators. An attorney working for the university has estimated the losses to be between $40 million and $100 million.
Craig Dilger, the board's outside lawyer handling the issue, has said the board could file suit against former officers or board members of the foundation, though no specific target has been publicly named.
Grissom said the committee will decide what to do in less than a month, but he would not be more specific. Its first meeting has not been set.
The committee is also charged with looking at a response to State Auditor Mike Harmon's December 2016 examination that found lax oversight of the foundation.
"Let's not play games with each other," Grissom said. "We have had two serious audits here. It's a little like the dog who chases the car, catches the car -- and then has to decide what to do with it. This board has to decide what is an appropriate action, if any, to be taken as a result of these two audits."
Grissom is the chairman of the committee, whose other members are trustees Raymond Burse, Sandra Frazier and James Rogers. U of L interim President Greg Postel is a nonvoting member of the group.
Unlike most actions of the 13-person trustee board, not everyone agreed with the move to establish the committee.
Enid Trucios-Haynes, a law professor who represents faculty on the board, and Vishnu Tirumala, the student representative, opposed the measure, while staff representative William Armstrong abstained.
Trucios-Haynes and Tirumala declined to comment. After the meeting ended, Grissom approached Tirumala and told him about a board policy that the only the chairman speaks to the press.
Grissom then told reporters he could not say why some trustees voted against establishing the committee.
"You'll have to ask them," he said.
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