LOUISVILLE, Ky. (WDRB) — Nearly five months after a forensic investigation detailed up to $100 million in losses through mismanagement and over-spending at the University of Louisville Foundation, the university still hasn’t decided whether to sue former President James Ramsey or other former board members or employees of the foundation.
But a deal is in the works that would at least keep the university from suing the foundation itself, which is a legally separate nonprofit organization.
The foundation’s board of directors on Thursday approved an agreement proposed by U of L’s board of trustees that would preclude any litigation between the two, “provided that the foundation continues to operate in the manner in which it’s committed to operate,” foundation interim executive director Keith Sherman said.
Foundation officials would not release the agreement, saying it is still a “draft” until their minor proposed changes are approved by the trustees, perhaps as soon as next week. They described it only in circumspect terms.
The agreement deals mostly with “governance and operating procedures,” foundation board member Earl Reed said during Thursday’s meeting.
The foundation has already implemented a myriad of reforms since Ramsey resigned in September 2016 and the board was remade in January.
But the new agreement with the university will “provide assurance and allay any concerns that what’s happened in the past isn’t going to happen again,” Sherman said.
Foundation chairwoman Diane Medley added that the agreement is aimed at ensuring the foundation remains independent from the university.
Trustees chairman David Grissom, who is also a foundation board member, did not immediately respond to a request for comment on Thursday.
The two boards have held countless discussions about litigation — all behind closed doors — since the forensic report was released June 8.
The case for U of L suing its own foundation has never been explained, but the foundation appears to maintain $25 million in insurance coverage for fraudulent actions by its board members and officers.