Monday, April 22, 2019

UW Oshkosh Foundation wins federal court approval for reorganization, prepares to exit bankruptcy

Photo by Miles Maguire
The Board of Regents of the UW System is taking ownership of the Alumni Welcome and Conference Center.
By Miles Maguire
A federal judge has approved the reorganization plan of the UW Oshkosh Foundation, bringing its bankruptcy case to within a few procedural steps of a close.

In an order dated April 11, Chief U.S. Bankruptcy Judge G. Michael Halfenger confirmed the foundation’s plan, which was submitted in February.

His approval means the end may be in sight for one of the most contentious and complicated chapters in the history of UW Oshkosh. It also leaves most of the parties in significantly changed circumstances. Here’s a summary, primarily based on court documents, of where those parties now stand.

The UW System Board of Regents is:

  • Making a net payment to banks of $6.3 million, which will come out of administrative overhead funds retained from federal grants rather than using state tax dollars.
  • Gaining title to the Alumni Welcome and Conference Center and overseeing a change in name to the Culver Family Welcome Center (or something similar).
  • Taking ownership of the personal property and real estate improvements associated with the Witzel Avenue Biodigester and getting a no-cost lease on the underlying land.
UW Oshkosh is:
  • Taking on a debt to the system of $3.8 million and making payments of $200,000 a year for the next two decades.
  • Cleared to use and maintain the conference center and biodigester purchased by the regents.
  • Continuing to operate the Oshkosh Sports Complex with an acknowledgement from lenders that a related bond issue has been paid in full.
  • Moving closer to having its accrediting body lift the warning label that it has placed on the school.
The UW Oshkosh Foundation is:
  • Emerging from bankruptcy with almost $22 million in endowment and other restricted funds.
  • Retaining control over another $265,000 in cash and unrestricted accounts.
  • No longer holding an ownership interest in a biodigester that operates on the state’s largest dairy farm in Rosendale or the title on a historic home on Congress Avenue it once provided as a residence for the UWO chancellor.
  • Retaining rights to various pledges that have been made by donors.
  • Going to make a “best efforts” attempt to negotiate a merger with a newly formed fundraising nonprofit called the Titan Alumni Foundation.
  • Continuing to hold a partial interest in the Best Western Premier Waterfront Hotel in Oshkosh and at least for the immediate future continuing to serve as a financial conduit for other investors.
  • Able to use office space at the campus welcome center at no cost beyond basic maintenance and with the assistance of support staff provided by the university.
  • Paying a total of about $500,000 in professional fees for legal, accounting, financial management and real estate services during the bankruptcy.
Former Chancellor Richard Wells and Vice Chancellor Thomas Sonnleitner are:
  • Awaiting action on a civil suit against them in Dane County that has been on hold since January 2018.
  • Awaiting action on a criminal case in Winnebago County that been adjourned until June 21.
UW Oshkosh declined comment. “I refer you to UW System on this,” said Mandy Potts, the school’s director of communications.

But Provost John Koker told a meeting of faculty members last week that the Higher Learning Commission has accelerated its efforts to lift the university’s “on notice” status. The HLC had slapped the warning label on the school in the wake of the civil suit against Wells and Sonnleitner.

Because the HLC provides the accrediting necessary for students to receive federal financial aid, its approval is critical for the continued operation of the university. The HLC had planned to revisit the issue in November, but Koker said the matter may be resolved as soon as this summer.

The foundation declined to comment.

No comments:

Post a Comment