UWO Foundation battles interference with pledges

Nikki Brahm, Assistant News Editor

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The UW Oshkosh Foundation has filed a brief to oppose temporarily suspending court proceedings, alleging that University officials intentionally harmed the Foundation’s reputation and interfered with pledges made to it since the Foundation filed for bankruptcy.

According to a brief in opposition to stay pending appeal and an affidavit, filed Nov. 21 in the U.S. District Court for the Eastern District of Wisconsin, Tim Mulloy, chairman of the UWO Foundation, negotiated a $2 million pledge to be paid in annual installments of $500,000 in exchange for naming rights to the Alumni Welcome and Conference Center. According to Mulloy’s affidavit, the donor made the first installment in 2016, before the Foundation filed for bankruptcy.

Mulloy alleges Chancellor Andrew Leavitt and Bob Roberts, now interim executive director of advancement, director grants and faculty development at UWO, met with the donor on what was thought to be a goodwill visit and arranged for him to donate to the University of Wisconsin Foundation instead, an official organization benefiting the University of Wisconsin Madison.

The donor issued a check for the University of Wisconsin Foundation, but after discussion with Mulloy, stopped payment on the check and held his installment pending resolution of the UWO Foundation’s bankruptcy proceedings.

In addition to this donor, the J. J. Keller Foundation also pledged to support the AWCC. In 2017, the J. J. Keller Foundation made the first installment, and in 2018 the UWO Foundation sent the J. J. Keller Foundation a pledge reminder. According to Mulloy’s affidavit, a J. J. Keller official called the UWO Foundation and “asked why the UWO Foundation sent the reminder, since Chancellor Leavitt contacted the J. J. Keller Foundation and instructed it to not send the pledge.”

The two installments remaining total nearly $43,000.
In his affidavit, Mulloy said he met in October 2018 with Robert Keller, chairman of J. J. Keller, updated Keller on the situation and Keller agreed to honor the 2018 pledge.

Another arrangement was made in 2013. According to the court document, the University negotiated an agreement with Sodexo to renew its food service contract on the condition that Sodexo pay $1.5 million, or $250,000 annually for six years, to help pay for the AWCC. In return, Sodexo would receive naming rights on an AWCC ballroom.

The contract was between the University and Sodexo; however, until 2018, payments were made directly to the UWO Foundation. The money was used to pay back First National Bank for financing the construction of the AWCC. However, in 2018, Mulloy alleges Sodexo’s General Manager Bill Rotchford stated Sodexo “could not pay its pledge because Bob Roberts was conducting an investigation.”

Separate affidavits from others tell similar stories. Former State Sen. Jessica King, now a lawyer and executrix for the estate of Kenneth Grieb, who had served as coordinator of the international studies department of UWO for decades, said she approached Leavitt at Grieb’s memorial reception and told him that Grieb had left a “generous gift” to the IS department. She also told Leavitt that she and others wanted to support the Model U.N. fund and Dr. Grieb’s professorship. Both funds are at the UW Oshkosh Foundation.

According to her affidavit, King said, “Chancellor Leavitt replied that I should work through a new entity being created because the UW Oshkosh Foundation was in bankruptcy. It was my understanding that Chancellor Leavitt wanted future contributions to be given to the new entity.”

According to another affidavit by emeritus UWO professor Gene Drecktrah, who is a current board member of the UWO Foundation, in three incidents since September 2018, UWO administrators told him the Foundation was “dissolving” or “not functioning.” In addition, he was told to instead make a donation to the “new” foundation.

Drecktrah alleged that the “new” foundation was referring to the Titan Alumni Foundation, which was formed in the fall.
Mulloy said he believes the formation of the Titan Alumni Foundation is a mistake.
“Why would we want to have two competing foundations?” Mulloy said.

In his affidavit, Mulloy said the Board of Regents has alleged that the UWO Foundation would be unable to repay the judgment amount of about $8 million if the UWO Foundation lost its appeal.

“The Board’s allegations are not true,” Mulloy said.
Mulloy stated that the UWO Foundation has an income of hundreds of thousands of dollars each year from management fees it charges to manage and distribute endowed funds, as well as equity interest in the Best Western Premier Waterfront Hotel and Convention Center.

Mulloy stated, “I believe that a portion of this income … would be available to pay the board over several years with interest.”

However, the UWO Foundation intends to file a Chapter 11 plan so it can “resume its mission of fundraising and benefitting the University.” As part of that plan, it will transfer the Witzel biodigester, which provides renewable energy to the UWO campus and is used for curriculum, and the AWCC to the University.

If the UWO Foundation cannot confirm a Chapter 11 plan by collecting on judgment, Mulloy recommends that the UWO Foundation liquidates both facilities.

Mulloy stated, “I do not think such an action is in the best interests of either the University or the UWO Foundation, but the reality is that those two assets are part of the reason the UWO Foundation was forced into bankruptcy, and selling those two assets will allow the UWO Foundation to exit bankruptcy.”

Mulloy said he hopes to have a decision on the stay by the end of the year.
“We’ve heard there’s overtures from the state in terms of wanting to sit down and talk, which, we’re optimistic about that,” Mulloy said. “The court rulings have been in our favor, we have a judgement in our favor. So if the Board of Regents wants to sit down and talk and try to get this settled outside of the courts we are open to sitting down.”

Leavitt and Director of Communications Mandy Potts were contacted for comment. Potts informed the A-T they do not comment on matters related to ongoing litigation.

History of project:
Between 2010 and 2013, the University asked the UWO Foundation for help to construct two biodigesters and a new conference center
The UWO Foundation agreed to initially own and finance the projects with the intention to later give the AWCC to the University
In order to finance the projects, former Chancellor Richard Wells and Vice Chancellor Thomas Sonnleitner promised to pay the debts to three banks who financed the projects if revenues couldn’t pay the debt

In 2016, the UWO Foundation approached new Chancellor Leavitt to pay the debts when they realized they could not, and he refused
The UWO Foundation filed Chapter 11 bankruptcy