Penn State Announces $59.7M Settlement With Sandusky Victims

October 28, 2013

Penn State officials announced Monday that over the past few months the university has reached agreement with 26 of the victims of former assistant football coach Gerald Sandusky.

The aggregate dollar amount paid by the university for the 26 settled claims is $59.7 million, according to the announcement.

The terms of the settlements, which include a release of all claims against Penn State and other parties, are subject to confidentiality agreements. Of the 26 settlements, 23 are fully signed and three are agreed in principle, with final documentation expected within the next few weeks, the university said.

“The Board of Trustees has had as one of its primary objectives to reach settlements in a way that is fair and respects the privacy of the individuals involved,” Keith Masser, chair of the Board of Trustees, said in a statement. “This is another important milestone in accomplishing that goal. I would like to thank the board’s Legal and Compliance Committee, as well as its Legal Subcommittee for its leadership throughout this process.”

“We hope this is another step forward in the healing process for those hurt by Mr. Sandusky, and another step forward for Penn State,” said University President Rodney Erickson. “We cannot undo what has been done, but we can and must do everything possible to learn from this and ensure it never happens again at Penn State.”

The settlement amounts will not be funded by student tuition, taxpayer funds or donations, according to officials.

The university said it maintains various liability insurance policies, which the university believes cover the settlements and defense of claims brought against Penn State and its officers, employees and trustees. (There has been an ongoing legal dispute, however, between Penn State and its primary general liability insurer, Pennsylvania Manufacturer’ Association Insurance Co.)

The school said expenses not covered by insurance are expected to be funded from interest revenues related to loans made by the university to its self-supporting units.

Penn State said it has received claims from 32 individuals who were or allege that they were victims of Sandusky. The university has rejected certain of the six remaining claims as being without merit and has engaged others in possible settlement discussions. The law firm of Feinberg Rozen LLP has been serving as independent third-party facilitators of the settlement negotiations between the university and the victims.

“I would like to thank Ken Feinberg and Michael Rozen for their efforts to facilitate the settlements,” Erickson said. “Their expertise and efforts have been invaluable to our ability to reach mutually acceptable resolutions in the large majority of the claims.”

Penn State said that over the past year, the university has instituted more than 115 changes related to safety, human resources, security, compliance and governance.

Penn State said that, through self-imposed urgency, the Board of Trustees, administration and staff have brought sweeping reform and best practice processes to nearly every aspect of the university’s governance and oversight. In doing so, the university considered the recommendations of multiple parties to determine the best course forward, including but not limited to the Pennsylvania Auditor General, Penn State University Faculty Senate and the Freeh Report recommendations.

“We have made great strides, but a great deal of work remains,” Erickson said. “Our university is a better institution today as a result of the work and dedication of our trustees, administrators, faculty, staff and students.”

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