The University of Louisville and its investment foundation on Monday agreed to an $800,000 settlement stemming from a long-running and expensive legal battle with the school’s former president, closing a turbulent chapter on campus.
As part of the deal to settle their lawsuit against ex-campus President James Ramsey and several other former U of L executives, the money will be funneled into the university’s foundation, which oversees the school’s investments. The $800,000 will be paid for the defendants through an insurance policy that covered foundation officers and directors, campus officials said.
The settlement amounted to a sliver of the tens of millions of dollars that the Atlantic Coast Conference school once claimed it had suffered in damages from what it contended was Ramsey’s mismanagement.
As of April, the University of Louisville Foundation had spent $3.5 million on legal fees for the case, WDRB-TV reported. The school also spent more than $2 million on a “forensic investigation” of Ramsey’s management of the foundation, which formed the basis of the 2018 lawsuit, the station reported.
After the school’s trustees and the foundation board approved the settlement on Monday, university officials sounded ready to put the tumultuous period behind them.
“This decision indicates our commitment to moving forward, but it should not be understood as representing anything beyond that,” said University of Louisville Trustees Board Chairwoman Mary Nixon. “We all agree the time has come for us to fully focus our collective time and resources on the university’s true mission of student success, groundbreaking research and engaging with the community to make it a better place for all.”
Ramsey’s attorney, Steve Pence, said his client was “satisfied” with the settlement and its “vindication of him, his staff” and members of the university and foundation boards that worked with him.
Ramsey was forced out as campus president in 2016 after leading Louisville for 14 years. Ramsey was credited with raising academic standards and boosting the school’s research reputation.
But he came under increasing fire for a string of embarrassments, including an FBI investigation of top university officials for alleged misuse of federal money and an NCAA investigation into whether a university employee paid women to strip and have sex with basketball players. The controversies boiled over after the Courier-Journal reported that trustees challenged Ramsey’s salary of more than $600,000, with millions more in deferred compensation paid by the university foundation.
The lawsuit accused Ramsey and other defendants of conspiring to divert millions of dollars from the foundation’s endowment into speculative and unauthorized ventures, putting the foundation at risk. It said the endowment was depleted through complicated and often unauthorized transactions designed to avoid scrutiny. The suit also claimed that Ramsey and other defendants colluded to pay excessive compensation to themselves and others. Pence said Monday that none of the accusations were proved.
Attorneys for Ramsey and the other defendants said that previous university and foundation boards approved the spending and compensation and that the money was spent for the benefit of U of L.
The University of Louisville and the foundation are not obligated to pay the defendants’ legal costs, according to terms of the agreement provided by the university. But the university and the foundation will pay their own legal costs from the dispute, a U of L official said Monday.
In 2018, Neeli Bendapudi was hired as U of L’s president to lead the school beyond the series of scandals. Bendapudi has received strong reviews for her stewardship of the school.
“The university community is pleased to put this issue behind us,” Bendapudi said of the settlement. “My team and I have been focused on building community, strengthening our financial standing, implementing our strategic plan and ensuring that U of L is a great place to learn, work and invest.”
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