Three former University of Louisville Foundation officials have filed a countersuit against the foundation, seeking to have it pay their legal fees in its own lawsuit against them over the management of its finances.
The lawsuit, filed this week in Franklin Circuit Court, states former Chief Financial Officers Michael Curtin and Jason Tomlinson and former board member Burt Deutsch “cannot afford what promises to be a lengthy and extremely expensive litigation” in the case brought by the foundation.
The trio are named along with former university President James Ramsey and his chief of staff, Kathleen Smith, in the foundation’s suit, which was filed last month and claims the defendants cost the foundation’s endowment millions of dollars. The law firm Stites & Harbison, which used to do work for the foundation, is also named as a defendant.
Ramsey made a similar request to avoid legal fees this month when he filed a motion in the foundation’s case asking a judge to order the foundation to cover his defense. The judge has not yet ruled on that issue.
Attorney Don Cox, who is representing Curtin, Tomlinson and Deutsch, said the university’s case against his clients could easily involve $1 million in attorneys’ fees for each of them, in addition to the cost of bringing expert witnesses on board.
Cox said his clients have a contractual right to have their legal expenses paid, based on the bylaws that were in effect during their time at the foundation. (Those provisions have since been updated.)
The foundation disputes the notion that it must pay the legal fees.
A special committee for the foundation passed a resolution this week that says the organization isn’t required to cover the defendants’ expenses.
Attorney Andy Campbell of the Alabama-based Campbell Guin law firm, which represents the university and the foundation, said the bylaws weren’t intended to give people who mismanaged assets “a free ride at the expense of the foundation in litigating that mismanagement.”
He also pointed out that the foundation’s bylaws were amended before the nonprofit filed its lawsuit.
Attorney Ann Oldfather, who represents Smith, said Monday that all the defendants, including her client, are entitled to have their legal expenses covered.
Campbell said University of Louisville and the foundation intend to move to have the lawsuit in Franklin Circuit Court either dismissed or halted, preferring instead to have a judge in Jefferson Circuit Court rule on the legal fees.
“It does not make sense to have two different judges in two different jurisdictions deciding that issue,” he said.
Morgan Watkins: 502-582-4502; [email protected]; Twitter: @morganwatkins26. Support strong local journalism by subscribing today: www.courier-journal.com/morganw.
