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UW Oshkosh Lawsuit Heads to Mediation

Tuesday, December, 18, 2018

The University of Wisconsin System gets a reprieve from paying several million dollars in debt while the lawsuit concerning the university goes into mediation. The decision to put the debt payments on hold was made by a federal judge.


The judge ruled that the request from the UW System to stop debt payments on foundation debt was satisfactory. The debt is between $7 and $8 million and related to several high-profile buildings. The judge also approved the request by the two sides to attempt mediation, which will be overseen by Magistrate Judge David Jones.


According to Foundation Board Chairman Tim Mulloy, there is a reason to be optimistic about the dispute getting settled in mediation. He said the state initiated the process and he reports his side is “more than willing to sit down and see if we can figure out a global solution here and move on.” He also pointed out mediation is not binding. He further explained the foundation is “close to filling its reorganization plan outlining how the foundation will restructure itself in response to the bankruptcy.”


The lawsuit was filed as part of the Chapter 11 bankruptcy proceedings. It would have forced the university to pay for the foundation’s debt on building projects. A decision of approval was issued by a judge, but the school appealed that decision.


The foundation filed for bankruptcy following the revelation that millions of dollars had been moved from the university to the private foundation and that former chancellor and vice chancellor had signed “comfort letters” to lenders.


According to Wisconsin state law, money can be moved from a private entity to a public one, but not the other way around. The two now face felony misconduct in office charges in Winnebago County Circuit Court.