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Wednesday, March 6, 2013

Alum Sues For Return of $7.5 Million Donation, Says Georgetown Law Reneged on Agreement to Name Fitness Center After Him Following Insider Trading Conviction

Georgetown Law Logo (2013)Dallas Morning News:  Scott K. Ginsburg, Renowned Seller of Exotic Cars, Sues Georgetown University to Retrieve $7.5 Million in Donations:

Scott K. Ginsburg made most of his many millions in the late 1990s, when he and Tom Hicks (briefly) partnered in the radio business and sold their offspring to Clear Channel for upwards of $17 billion. ... [L]ike many wealthy men, Ginsburg needed more to show off than just his money. As he told the Dallas Observer in 1999, “Let me suggest that I don’t have a small ego.”

Which is why he was only too happy to donate $5 million to the Georgetown University Law Center in March 2000: The money would go toward the construction of a new fitness center to be branded the Scott K. Ginsburg Health and Fitness Center. His name would be on the side in big bold letters; his picture would be displayed inside. Agreements were signed; press releases, issued. 

But 12 years, millions more in donations and one insider-trading judgment later, and still Ginsburg’s name is nowhere to be found on campus (or on the school’s website, for that matter). And now he wants his money returned: On Monday Ginsburg sued the university in Dallas federal court, and he hopes to recover “at least $7.5 million as the full amount of Georgetown’s unjust enrichment.” ...

On September 9, 1999, the Securities and Exchange Commission accused Ginsburg of leaking inside information to his father and brother. A jury later ordered him to pay $1 million. The trial judge set aside the verdict, but the Securities and Exchange Commission appealed and won. The case would eventually find its way into legal textbooks.

After the jury ruled for the SEC, says the suit, Georgetown got cold feet. According to an exhibit filed with the lawsuit, on May 2, 2002, then-Georgetown Law Center Dean Judith Areen sent Ginsburg a letter thanking him for his “support,” “generosity” and “steadfast loyalty.” She also wanted to redo the agreement, removing the promise of naming rights from the deal … at least until the whole SEC thing blew over. Said the missive, Areen wanted to figure out some some way to “honor [Ginsburg's] gift without generating negative media coverage.” She said they’d revisit the deal “if the jury verdict is overturned.” But Ginsburg says he balked at the revised agreement, and that it was never signed.

(Hat Tip: Inside Higher Ed.)

Update:

http://taxprof.typepad.com/taxprof_blog/2013/03/alum-sues.html

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Comments

I would have done the same thing as SKG....

I'm sorry for those that believe in academic integrity and all....but money talks, and bullshit walks....If you honestly believed that students paid the salary of professors, a lot of faculty would have been fired long ago for poor teaching performance....but since thats not the case, then we look elsewhere for revenue....and here we land.

However, to counter the forthcoming argument, there is, of course, the case of the Enron/Worldcom folks that had buildings & chairs named after them.... but, if the [school] removes the name, the $ should go with it....because the only reason you named the chair was because of the $....so easy come, easy go.

The idea that academia is holier-than-thou might have worked for generation or two, but the law schools and the associated faculty haven't done a great deal of good in the PR department to justify thier continued existance (1) at the current tuition $ rate, and (2) if such rate was funded by $ such as this.

The funny part....is that I asked my alma mater what could I do with a donation....and I was handed a pricing sheet (1 bookshelf in the library = X, 1 faculty office = Y, 1 memorial court yard = Z, and I coulc only expect the salivation on the price of... law school = __,___,____)....

Feel free to start shooting......now.

And no...I am not Campos.

Posted by: Adj Prof D | Mar 6, 2013 7:25:16 PM

Wonder if SKG has been advised of the income tax consequences of winning back that $7.5 million donation.

Posted by: Herbert Lazerow | Mar 6, 2013 11:12:22 PM

I wonder if there was a morals clause, similar to what athletes have. (Maybe there should be, when naming rights are involved.) Perhaps there was not--I got curious and found a standard gift agreement online for UVA, and the best it had was a "future changed circumstances" clause--essentially a cy pres clause. Maybe there's an argument to be made there. I'm guessing GT didn't have anything too solid, which is why they sent him an amended gift agreement. I highly doubt they can afford to lose 7.5 million dollars right now--that's the same as the tuition for about 150 students, assuming $50k each. I'm not sure if they are on their own or if the university helps them out with that. Maybe they can slap his name on the building in a hurry. I'd suggest comic sans and putting his name in scare quotes.

Posted by: Bubba | Mar 7, 2013 11:05:42 AM

Many prisoners are very dedicated to physical fitness. What would be so wrong or incongruous about dedicating a fitness center to the memory of someone in [or at least eligible for] prison?

Posted by: Joseph W. Mooney | Mar 7, 2013 11:31:17 AM