UofL board of trustees chairman J. David Grissom and interim president Greg Postel spoke with reporters after the trustees’ meeting on Thursday. | Photo by Joe Sonka

The University of Louisville board of trustees created an ad-hoc special litigation committee at its meeting on Thursday. The committee will direct any action the university takes regarding the findings of the forensic investigation that found mismanagement and overspending of the university’s endowment by the UofL Foundation under the administration of former President James Ramsey.

Board chairman J. David Grissom said after the meeting that while the trustees were still gathering some information in the wake of the June investigation by Chicago-based accounting firm Alvarez & Marsal, he expected the new committee to finalize recommended actions to take within the next month, which might involve litigation against former foundation officials.

The resolution to create the ad-hoc special litigation committee had two dissenting votes — faculty representative Enid Trucios-Haynes and staff representative William Armstrong — but passed without discussion after an hour-and-a-half closed session. It directs the new committee “to take any and all actions it deems appropriate to protect and serve the interests of the university on all matters related to” the investigation, “including but not limited to initiating litigation, effecting settlement with any party, and resolving any issue raised” by the investigation.

The resolution also directs the committee “to retain such legal counsel and other professional advisers as it deems necessary or appropriate for the discharge of its functions,” in addition to keeping the other trustees advised on the actions it is taking.

The new committee is chaired by Grissom, and includes the trustees Raymond Burse, Sandra Frazier and James Rogers. Interim President Greg Postel in also an ex-officio non-voting member of the committee.

Grissom said the four-member committee would have the final say on what legal action UofL decides to take, but added that the full 13-member board “will be kept fully apprised” on their work.

“The board is going to be fully informed and kept abreast of everything as it proceeds,” said Grissom. “We just felt that to have a smaller, more manageable group of people to consider the options that are available to the board and to the university was a more appropriate way to proceed.”

Asked why two trustees voted against this resolution, Grissom told reporters they would have to ask those members, but then added that the board had a policy “that the chairman of the board speaks for the board, and the vote was by a majority of the board, so I think that speaks for itself.” He added that “the board adopted that policy six or seven months ago. I think it’s in the minutes.”

UofL spokesman John Karman told IL he did not think there was a formal vote or resolution on the policy Grissom referred to, “but this was agreed upon by this particular group of trustees at, I believe, its first meeting in January.”

Noting that it was a complex question on whether or not to proceed with litigation, and if so, against whom, Grissom said “it’s a little bit like the dog that chases the car, catches the car, and now says ‘what are we going to do with it?’ This board has to decide what is an appropriate action, if any, to be taken as a result of these audits.” One of the factors that Grissom said they have to take into consideration is “the costs of litigation.”

“Does protracted litigation further damage the reputation of the university?” asked Grissom. “Does further litigation imperil the carrying out of a really successful presidential search? Those are things that this committee is going to be thinking about.”

Grissom said that another factor to consider on litigation “is what resources are on the other side, what assets are there to collect. Collectibility becomes an issue.” He added that he thought the trustees had already collected “the bulk” of information needed to make a decision, but they were still collecting information and “we’re learning a lot of things every day.”

Asked what new information they’re learning, he cited a Courier-Journal article from this week finding that former UofL President James Ramsey’s former top aide, Kathleen Smith, had transferred nearly $800,000 in assets to a shell company, questioning whether that was done in anticipation of a lawsuit against her by the university.

This story has been updated.