Major University of Louisville Foundation donor questions spending, calls for audit

LOUISVILLE, Ky. (WDRB) – A judge has denied former University of Louisville President James Ramsey’s request to dismiss a lawsuit the university filed in April alleging Ramsey committed fraud and mismanagement while at the helm of the university’s nonprofit foundation.

Ramsey had contended the university and foundation’s claims against him were too vague for the case to proceed.

But in a ruling dated Wednesday, Jefferson County Circuit Judge Judith McDonald-Burkman denied Ramsey’s request to throw out the case. McDonald-Burkman also ruled that Ramsey is not entitled to a “more definite statement” from the university and foundation as to what he allegedly did wrong.

The lawsuit centers on Ramsey’s management of the nonprofit U of L Foundation, of which he was also president until he resigned both jobs under pressure in 2016.

It alleges that Ramsey and a handful of other former top administrators depleted the university’s endowment to fund excessive spending, including lavish compensation for themselves, while using “creative accounting” to conceal the activity.

For example, the lawsuit takes aim the foundation’s “unreasonably excessive” deferred compensation program in which Ramsey, Smith and other top administrators were paid a total of $22 million from 2005 to 2016, including $8.75 million for Ramsey and $2.6 million for Smith.

Ramsey’s attorney, Steve Pence, said Ramsey will now begin defending himself in court like the other people named in the lawsuit – such as Ramsey’s former chief of staff, Kathleen Smith.

He said the judge’s ruling “doesn’t really say anything” about the merits of the lawsuit.

Pence added that Ramsey will file a counter-suit against the university and foundation, though he declined to say what claims Ramsey will pursue.

Andy Campbell, the attorney for the university and foundation, applauded the ruling in a statement.

“We look forward to vigorously prosecuting our full case to the court and recovering money which will be put back into the endowment it was improperly spent from,” Campbell said.

Reach reporter Chris Otts at 502-585-0822, cotts@wdrb.com, on Twitter or on Facebook. Copyright 2018 WDRB News. All rights reserved.

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Chris Otts reports for WDRB.com about business and economic topics, higher education and local / state government. He joined WDRB News in 2013 after seven years with The Courier-Journal. Got a tip? Chris is at 502-585-0822 and cotts@wdrb.com.