LOUISVILLE, Ky. (WDRB) -- The University of Louisville settled a lawsuit against former president James Ramsey and his chief of staff, Kathleeen Smith.
In a release, U of L said the Board of Trustees and the University of Louisville Foundation approved terms agreed to in a mediation to settle the suit. As reported by WDRB News on Friday, the agreement reached in January was to accept $800,000 in insurance money for damages it once estimated at more than $80 million.
"Today’s litigation settlement announcement enables the University of Louisville community to move forward and focus on our bright future," Foundation Board Chairman W. Earl Reed III said in the release. "With the challenges of the recent past firmly behind us, the university is well positioned for future success."
Reed said the litigation serves as a wake-up call and a catalyst for reforms to enact tighter financial controls.
According to the release, the foundation has a main endowment of $824 million with total assets of more than $1.3 billion, which it said is the strongest financial position since being formed in 1970. Since 2016, the foundation hired a new investment advisor that has brought substantial gains with all accounts in the black.
“We are grateful to President Neeli Bendapudi and the Board of Trustees for the close relationship and their faith that we have truly righted the ship, while ensuring the appropriate checks and balances are intact," Reed said in a statement.
University of Louisville, Grawemeyer Hall.
U of L and its nonprofit foundation lost millions of dollars pursuing “financial fraud” claims against Ramsey, Smith and three other former officials, all of whom left U of L about the time of Ramsey’s ouster in 2016.
“The university community is pleased to put this issue behind us,” Bendapudi said in the release. “My team and I have been focused on building community, strengthening our financial standing, implementing our strategic plan and ensuring that UofL is a great place to learn, work and invest. For UofL, the best is truly yet to come.”
As of April, the U of L Foundation had spent $3.5 million on legal fees for the case. U of L also spent more than $2 million on a 2017 “forensic investigation” of Ramsey’s management of the foundation, which formed the basis of the 2018 lawsuit.
In the lawsuit, U of L and its foundation alleged Ramsey, Smith and other defendants “depleted” the university’s endowment, a pool of donations invested in financial markets for the long-term benefit of the university.
Ramsey, Smith and others “disguised” their “excessive and unauthorized” endowment spending and “paid themselves (and others) excessive compensation out of the Foundation,” according to the lawsuit.
Related stories:
- $800k settlement of U of L's lawsuit against ex-president must go forward, judge rules
- Deal to end University of Louisville's Ramsey lawsuit breaks down over IRS claims
- University of Louisville to mediate financial fraud lawsuit against former president
Copyright 2021 WDRB Media. All Rights Reserved.
