Colleges in Dire Financial Straits

[pgher]

Perhaps this deserves a separate thread, but in cases like Cincinnati Christian, why aren't trustees legally held to account for breaches of fiduciary duty? Is it because "stupid" is not considered "illegal," and everything is labeled the former?

My bet is that people don't know to file the lawsuits for breach of fiduciary duty until the college actually goes under.

I would say it's what Spork says. Incompetence is not illegal. From https://definitions.uslegal.com/b/breach-of-fiduciary-duty/

When one person does agree to act for another in a fiduciary relationship, the law forbids the fiduciary from acting in any manner adverse or contrary to the interests of the client, or from acting for his own benefit in relation to the subject matter.

So it's illegal to purposely run an institution into the ground, or to make deals that benefit the trustees at the expense of the institution. It's not illegal to have a plan best described as "ludicrously optimistic wishful thinking."

[downer]

Perhaps this deserves a separate thread, but in cases like Cincinnati Christian, why aren't trustees legally held to account for breaches of fiduciary duty? Is it because "stupid" is not considered "illegal," and everything is labeled the former?

My bet is that people don't know to file the lawsuits for breach of fiduciary duty until the college actually goes under.

I would say it's what Spork says. Incompetence is not illegal. From https://definitions.uslegal.com/b/breach-of-fiduciary-duty/

When one person does agree to act for another in a fiduciary relationship, the law forbids the fiduciary from acting in any manner adverse or contrary to the interests of the client, or from acting for his own benefit in relation to the subject matter.

So it's illegal to purposely run an institution into the ground, or to make deals that benefit the trustees at the expense of the institution. It's not illegal to have a plan best described as "ludicrously optimistic wishful thinking."

3 years after Dowling College closed, creditors have just filed a $50M lawsuit against the trustees and other officials. It will be interesting to see how that works out.
https://www.newsday.com/long-island/education/dowling-college-bankruptcy-1.33415884

[pgher]

Perhaps this deserves a separate thread, but in cases like Cincinnati Christian, why aren't trustees legally held to account for breaches of fiduciary duty? Is it because "stupid" is not considered "illegal," and everything is labeled the former?

My bet is that people don't know to file the lawsuits for breach of fiduciary duty until the college actually goes under.

I would say it's what Spork says. Incompetence is not illegal. From https://definitions.uslegal.com/b/breach-of-fiduciary-duty/

When one person does agree to act for another in a fiduciary relationship, the law forbids the fiduciary from acting in any manner adverse or contrary to the interests of the client, or from acting for his own benefit in relation to the subject matter.

So it's illegal to purposely run an institution into the ground, or to make deals that benefit the trustees at the expense of the institution. It's not illegal to have a plan best described as "ludicrously optimistic wishful thinking."

3 years after Dowling College closed, creditors have just filed a $50M lawsuit against the trustees and other officials. It will be interesting to see how that works out.
https://www.newsday.com/long-island/education/dowling-college-bankruptcy-1.33415884

If what the article says is true, I'd say this crosses the line. Inside deals with trustees, taking on debt far in excess of ability to repay, etc.

[tuxthepenguin]

Henderson State University's president resigns, effective immediately:

https://katv.com/news/local/henderson-state-university-president-submits-resignation.

How convenient that he can skip town for a year and return as a tenured faculty member.

Alternatively, how convenient that they're following through on his contract, since he was almost certainly given tenure in the hiring negotiations.

I looked up his salary. I wouldn't take the job of president for a salary that low even if it came with tenure.

[ex_mo]

Perhaps this deserves a separate thread, but in cases like Cincinnati Christian, why aren't trustees legally held to account for breaches of fiduciary duty? Is it because "stupid" is not considered "illegal," and everything is labeled the former?

My bet is that people don't know to file the lawsuits for breach of fiduciary duty until the college actually goes under.

I would say it's what Spork says. Incompetence is not illegal. From https://definitions.uslegal.com/b/breach-of-fiduciary-duty/

When one person does agree to act for another in a fiduciary relationship, the law forbids the fiduciary from acting in any manner adverse or contrary to the interests of the client, or from acting for his own benefit in relation to the subject matter.

So it's illegal to purposely run an institution into the ground, or to make deals that benefit the trustees at the expense of the institution. It's not illegal to have a plan best described as "ludicrously optimistic wishful thinking."

3 years after Dowling College closed, creditors have just filed a $50M lawsuit against the trustees and other officials. It will be interesting to see how that works out.
https://www.newsday.com/long-island/education/dowling-college-bankruptcy-1.33415884

If what the article says is true, I'd say this crosses the line. Inside deals with trustees, taking on debt far in excess of ability to repay, etc.

There was a case cited in this thread on the old Fora about Saint Joseph's in Indiana which closed a few years back. A few faculty members sued for breach of contract and, IIRC, settled out of court.

[spork]

Henderson State University's president resigns, effective immediately:

https://katv.com/news/local/henderson-state-university-president-submits-resignation.

How convenient that he can skip town for a year and return as a tenured faculty member.

Alternatively, how convenient that they're following through on his contract, since he was almost certainly given tenure in the hiring negotiations.

I looked up his salary. I wouldn't take the job of president for a salary that low even if it came with tenure.

This brings up an interesting conundrum for small, struggling institutions. My employer has cycled through so many "hired with tenure" administrators that we now have an overhang of very expensive, totally unneeded faculty. A higher starting salary but no tenure would have been less expensive given their short half lives in the jobs for which they were originally hired.

[onthefringe]

U of Alaska regents declare financial exigency, enablng faster downsizing. Not that they appear to have anything resemblng a plan at this time. I can't see how the math works if you ask each campus to make that kind of cut individually, but closing branches is quite problematic, and the President's proposal of somehow moving to a "single university" model seems very difficult to enact in a short time period (and that's assuming you think that model would serve the state and the students at all).

[lightning]

Henderson State University's president resigns, effective immediately:

https://katv.com/news/local/henderson-state-university-president-submits-resignation.

How convenient that he can skip town for a year and return as a tenured faculty member.

Alternatively, how convenient that they're following through on his contract, since he was almost certainly given tenure in the hiring negotiations.

I looked up his salary. I wouldn't take the job of president for a salary that low even if it came with tenure.

This brings up an interesting conundrum for small, struggling institutions. My employer has cycled through so many "hired with tenure" administrators that we now have an overhang of very expensive, totally unneeded faculty. A higher starting salary but no tenure would have been less expensive given their short half lives in the jobs for which they were originally hired.

It's maddening. Sometimes the fired administrator who was "hired with tenure" gets to keep a salary that is much higher than the faculty in the academic unit that he/she would be joining but without going through the tenure-track process and the peer review that comes with the tenure track. It should come as no surprise, if they are research hacks and mediocre teachers. 

It's almost as if there is a whole new path to a tenured faculty position that people intentionally plan on taking. I'm beginning to think that people take jobs as administrators, with the intention of stepping down, after a few years, into a tenured faculty position, because the tenured faculty position is what they were really after.

[spork]

Midstate College in Peoria will close next month: https://www.pjstar.com/news/20190723/midstate-college-to-cease-operations-next-month.

[scamp]

It's almost as if there is a whole new path to a tenured faculty position that people intentionally plan on taking. I'm beginning to think that people take jobs as administrators, with the intention of stepping down, after a few years, into a tenured faculty position, because the tenured faculty position is what they were really after.

How often are administrative jobs (with a step back down to faculty as an option) given with tenure upon hire to people who hadn't earned it elsewhere? In my limited experience, the administrator typically has already been a full professor elsewhere.

[dr_codex]

It's almost as if there is a whole new path to a tenured faculty position that people intentionally plan on taking. I'm beginning to think that people take jobs as administrators, with the intention of stepping down, after a few years, into a tenured faculty position, because the tenured faculty position is what they were really after.

How often are administrative jobs (with a step back down to faculty as an option) given with tenure upon hire to people who hadn't earned it elsewhere? In my limited experience, the administrator typically has already been a full professor elsewhere.

Almost never, I'd say. People have either earned tenure elsewhere, have gone through an expedited tenure process at new place, or both.

As a rule, the option to revert to faculty is put out there precisely because people would otherwise not leave tenured positions.

[spork]

I keep telling search committee members to stop making finalists out of people we don't need (e.g., English, religious studies, philosophy, art) and short list only people with backgrounds we could use on the faculty -- because invariably that's where they end up when they get fired. No one cares what I say though.

[spork]

Brief updates on three closed VT colleges: https://www.vpr.org/post/status-update-3-recently-closed-vermont-colleges#stream/0.

[lightning]

It's almost as if there is a whole new path to a tenured faculty position that people intentionally plan on taking. I'm beginning to think that people take jobs as administrators, with the intention of stepping down, after a few years, into a tenured faculty position, because the tenured faculty position is what they were really after.

How often are administrative jobs (with a step back down to faculty as an option) given with tenure upon hire to people who hadn't earned it elsewhere? In my limited experience, the administrator typically has already been a full professor elsewhere.

Almost never, I'd say. People have either earned tenure elsewhere, have gone through an expedited tenure process at new place, or both.

As a rule, the option to revert to faculty is put out there precisely because people would otherwise not leave tenured positions.

In my own limited experience, hiring an administrator with fallback to tenured faculty, happens more than it should. I'm in complete agreement that the option to revert to faculty is put out there precisely because people would otherwise not leave tenured positions, but I should also add that it is very difficult to make a lateral move from a tenured faculty position to another tenured faculty position. Going into admin, with the fallback of reverting to faculty, is one path to making a lateral faculty move with tenure, with an intentionally lucrative brief stint as an administrator. Then there are those people, with cheesy degrees, and never ever had a faculty position nor a real research agenda, like that clown that ran University of Akron for a couple of years, and then joined the faculty with an unfairly high faculty salary, after he was chased out of the admin role. At my own uni, I deal with a glorified academic/student support administrator who has wheedled their way onto the faculty and is allocating more and more time to the role of faculty (spending time on research, teaching a 1/1 and some years a 1/2). I know exactly how that story will end.

[spork]

Marlboro College (VT) will merge with University of Bridgeport (CT): https://www.ctpost.com/local/article/University-of-Bridgeport-Marlboro-College-to-14137002.php.

This makes no sense at all.