AAUP Executive Committee Letter
to Membership Regarding Lawsuit
to Membership Regarding Lawsuit
Dear Colleagues,
Given that the Second Amended Complaint filed by a group of plaintiffs against Rider University over the sale of Westminster is of interest to all members of the AAUP bargaining unit, and given that the Complaint runs 50 pages, we thought we would try to give you the short version of what is being alleged. We have done this by describing sections of the Complaint in boldface and cutting and pasting sections of it. The sections in italics are quotes from the Complaint. We have also attached a link to the full complaint.
The primary thrust of the complaint is that the merger agreement entered into by Rider in 1991 forbids the outright sale of Westminster and in particular the sale of its academic programs.
In the 1991 merger instrument Rider accepted the responsibility of continuing to maintain and operate Westminster Choir College in exchange for the gift of the Westminster property, goodwill, faculty and course offerings and represented that it would continue to operate and fund the Westminster campus in Princeton under the separate Westminster identity. Such representations by Rider were the consideration for the Westminster’s Trustees’ agreement to the merger, including plaintiff trustees
The merger agreement was conditioned on Rider’s continued operation, maintenance and funding of Westminster Choir College on its Princeton campus.
In agreeing to the merger, the parties expressly agreed that the merger was for the specific “intention of continuing the purposes of WCC,...”
The agreement required that “...[A]fter the Merger of the institutions Rider will:
(a)Preserve, promote and enhance the existing missions, purposes, programs and traditions of WCC, including, without limiting the generality of the foregoing, the continuation of the mission of WCC through its emphasis on instruction in sacred music; training of minister of music; choral, vocal, and instrumental performance; and preparation of music teachers.
(b)Ensure that the separate identify of WCC, its programs and activities and its faculty will be recognized, and the current and future WCC alumni will continue to be so identified;
These provisions require, absent exigent circumstances, that Rider continue to operate Westminster Choir College for the stated purposes and maintain its “separate identity” as an institution of higher education.
Secondly, the complaint points out that while the campus might be sold under the merger agreement that could only occur under circumstances that do not presently exist.
Pursuant to the 1991 agreement Rider is obligated to continue to operate the Westminster campus unless it becomes “substantially impracticable” or “would substantially adversely affect the affiliated institutions,” see Agreement of Merger at §2.3, conditions that do not arise as Westminster has had a financial surplus, increasing revenues, increasing donations, and stable student admissions.
Financial documents generated by Rider’s Vice President for Finance & Treasurer Julie Karns, for the 2016 fiscal year, demonstrate that in 2016 Westminster ran at a surplus of $2,850,000 (Two Million, Eight Hundred Thousand Dollars).
Similarly, Rider’s documents show that in fiscal year 2015 Rider showed a surplus of $1,324,000 (one million, three hundred and twenty-four thousand dollars).
During this same time period Rider has operated at a deficit, for example, ending 2016 with a $2.5 million deficit, according to its Moody’s rating.
As such facts demonstrate, Rider’s claimed $10 million annual deficit, that it has stated is the basis on which it has determined the need to to sell Westminster, is not caused by Westminster that, in contrast to Rider University, operated in 2016 and 2015 at a surplus.
Along with its stable student base and its surplus, Westminster’s cash gifts increased from $2,088,051 in 2015 to 2,196,481 for the 2016 fiscal year.
Unlike Rider University that has lost approximately 1,000 students over the past six years, Westminster’s student census has remained stable, at least until Rider announced its intention in November 2016 to sell Westminster and close the campus.
Thirdly, the complaint states that by recruiting students, Rider had entered into a specific contract to provide those students with conditions and programs that cannot be provided anywhere else. By intending to close Westminster, Rider is failing to meet its contractual obligation to those students and their parents.
That notwithstanding the express terms of Defendant’s Offer made in the City of New York, as accepted by the Parent and Student Plaintiffs in the City of New York, and the resulting Contract between them, the Defendant has sought to sell the real property of Westminster and take other actions that would compromise if not completely dismantle the Programs and Degree as well as the Facilities of Westminster.
That any action by the Defendant to compromise or dismantle the degrees, programs or facilities of Westminster would result in irreparable harm to the Plaintiff Parents and Students. Because the Programs and Degrees as well as the Facilities of Westminster are unparalleled globally, the Parent and Student Plaintiffs would be unable to find comparable Programs and Degrees nor Facilities anywhere else in the world, should the Defendant’s action be permitted to continue.
Such damages include lost tuition, and more importantly lost career opportunity, which only the Programs and Degrees and Facilities at Westminster can provide.
As a result of the foregoing, the Defendant is liable to the Parent and Student Plaintiffs, as third party beneficiaries, for anticipatory and actual breach of the Merger Agreement and the Defendant is liable to the Parent and Student Plaintiff’s for actual, reliance and consequential monetary damages in an amount in excess of $75,000 to be proved at trial.
Finally, the complaint alleges fraudulent actions by Rider by inducing students to enroll and donors to contribute while intending to close Westminster.
Defendant, by its inducement of plaintiffs’ agreement to attend Westminster and/or its inducement of the contracts under which students attended Westminster, through the concealment of defendant’s intent to close the school or sell the Westminster campus, acted to commit a deceptive act or practice in violation of the N.Y. Deceptive Practices Act, G.B.L. §349 and/or §350 for which defendant is liable for actual damages and punitive or treble damages
Defendant, by its inducement of plaintiffs’ donations to Westminster Choir College in this District in the 2015 and 2016 fundraising events at the Racquet Club and other venues through the concealment of defendant’s intent to close the school or sell the Westminster campus, acted to commit a deceptive act or practice in violation of the N.Y. Deceptive Practices Act, G.B.L. §349 or §350 for which defendant is liable for actual damages and punitive or treble damages along with attorneys fees, interest and cost of suit in an amount in excess of $75,000 to be proved at trial.
https://www.savewestminster.org/wp-uploads/2nd_Amended_Complaint.pdf
AAUP Executive Committee,
Elizabeth Scheiber, President
Mike Brogan, VP
Jeff Halpern, CGO
Joel Phillips, AGO
Kathy Price, Treasurer/Fin. Sec
Kathleen Pierce, Recording Sec.
Tracey Garrett, At-Large Member
Matthew Goldie, At-Large Member
Art Taylor, Immediate Past President
Given that the Second Amended Complaint filed by a group of plaintiffs against Rider University over the sale of Westminster is of interest to all members of the AAUP bargaining unit, and given that the Complaint runs 50 pages, we thought we would try to give you the short version of what is being alleged. We have done this by describing sections of the Complaint in boldface and cutting and pasting sections of it. The sections in italics are quotes from the Complaint. We have also attached a link to the full complaint.
The primary thrust of the complaint is that the merger agreement entered into by Rider in 1991 forbids the outright sale of Westminster and in particular the sale of its academic programs.
In the 1991 merger instrument Rider accepted the responsibility of continuing to maintain and operate Westminster Choir College in exchange for the gift of the Westminster property, goodwill, faculty and course offerings and represented that it would continue to operate and fund the Westminster campus in Princeton under the separate Westminster identity. Such representations by Rider were the consideration for the Westminster’s Trustees’ agreement to the merger, including plaintiff trustees
The merger agreement was conditioned on Rider’s continued operation, maintenance and funding of Westminster Choir College on its Princeton campus.
In agreeing to the merger, the parties expressly agreed that the merger was for the specific “intention of continuing the purposes of WCC,...”
The agreement required that “...[A]fter the Merger of the institutions Rider will:
(a)Preserve, promote and enhance the existing missions, purposes, programs and traditions of WCC, including, without limiting the generality of the foregoing, the continuation of the mission of WCC through its emphasis on instruction in sacred music; training of minister of music; choral, vocal, and instrumental performance; and preparation of music teachers.
(b)Ensure that the separate identify of WCC, its programs and activities and its faculty will be recognized, and the current and future WCC alumni will continue to be so identified;
These provisions require, absent exigent circumstances, that Rider continue to operate Westminster Choir College for the stated purposes and maintain its “separate identity” as an institution of higher education.
Secondly, the complaint points out that while the campus might be sold under the merger agreement that could only occur under circumstances that do not presently exist.
Pursuant to the 1991 agreement Rider is obligated to continue to operate the Westminster campus unless it becomes “substantially impracticable” or “would substantially adversely affect the affiliated institutions,” see Agreement of Merger at §2.3, conditions that do not arise as Westminster has had a financial surplus, increasing revenues, increasing donations, and stable student admissions.
Financial documents generated by Rider’s Vice President for Finance & Treasurer Julie Karns, for the 2016 fiscal year, demonstrate that in 2016 Westminster ran at a surplus of $2,850,000 (Two Million, Eight Hundred Thousand Dollars).
Similarly, Rider’s documents show that in fiscal year 2015 Rider showed a surplus of $1,324,000 (one million, three hundred and twenty-four thousand dollars).
During this same time period Rider has operated at a deficit, for example, ending 2016 with a $2.5 million deficit, according to its Moody’s rating.
As such facts demonstrate, Rider’s claimed $10 million annual deficit, that it has stated is the basis on which it has determined the need to to sell Westminster, is not caused by Westminster that, in contrast to Rider University, operated in 2016 and 2015 at a surplus.
Along with its stable student base and its surplus, Westminster’s cash gifts increased from $2,088,051 in 2015 to 2,196,481 for the 2016 fiscal year.
Unlike Rider University that has lost approximately 1,000 students over the past six years, Westminster’s student census has remained stable, at least until Rider announced its intention in November 2016 to sell Westminster and close the campus.
Thirdly, the complaint states that by recruiting students, Rider had entered into a specific contract to provide those students with conditions and programs that cannot be provided anywhere else. By intending to close Westminster, Rider is failing to meet its contractual obligation to those students and their parents.
That notwithstanding the express terms of Defendant’s Offer made in the City of New York, as accepted by the Parent and Student Plaintiffs in the City of New York, and the resulting Contract between them, the Defendant has sought to sell the real property of Westminster and take other actions that would compromise if not completely dismantle the Programs and Degree as well as the Facilities of Westminster.
That any action by the Defendant to compromise or dismantle the degrees, programs or facilities of Westminster would result in irreparable harm to the Plaintiff Parents and Students. Because the Programs and Degrees as well as the Facilities of Westminster are unparalleled globally, the Parent and Student Plaintiffs would be unable to find comparable Programs and Degrees nor Facilities anywhere else in the world, should the Defendant’s action be permitted to continue.
Such damages include lost tuition, and more importantly lost career opportunity, which only the Programs and Degrees and Facilities at Westminster can provide.
As a result of the foregoing, the Defendant is liable to the Parent and Student Plaintiffs, as third party beneficiaries, for anticipatory and actual breach of the Merger Agreement and the Defendant is liable to the Parent and Student Plaintiff’s for actual, reliance and consequential monetary damages in an amount in excess of $75,000 to be proved at trial.
Finally, the complaint alleges fraudulent actions by Rider by inducing students to enroll and donors to contribute while intending to close Westminster.
Defendant, by its inducement of plaintiffs’ agreement to attend Westminster and/or its inducement of the contracts under which students attended Westminster, through the concealment of defendant’s intent to close the school or sell the Westminster campus, acted to commit a deceptive act or practice in violation of the N.Y. Deceptive Practices Act, G.B.L. §349 and/or §350 for which defendant is liable for actual damages and punitive or treble damages
Defendant, by its inducement of plaintiffs’ donations to Westminster Choir College in this District in the 2015 and 2016 fundraising events at the Racquet Club and other venues through the concealment of defendant’s intent to close the school or sell the Westminster campus, acted to commit a deceptive act or practice in violation of the N.Y. Deceptive Practices Act, G.B.L. §349 or §350 for which defendant is liable for actual damages and punitive or treble damages along with attorneys fees, interest and cost of suit in an amount in excess of $75,000 to be proved at trial.
https://www.savewestminster.org/wp-uploads/2nd_Amended_Complaint.pdf
AAUP Executive Committee,
Elizabeth Scheiber, President
Mike Brogan, VP
Jeff Halpern, CGO
Joel Phillips, AGO
Kathy Price, Treasurer/Fin. Sec
Kathleen Pierce, Recording Sec.
Tracey Garrett, At-Large Member
Matthew Goldie, At-Large Member
Art Taylor, Immediate Past President