University of Wisconsin-Oskosh’s private foundation is considering bankruptcy to cover $14.5 million in debt to cover real estate projects.
The possibility arose at its latest meeting and comes on the heels of a lawsuit the state Department of Justice filed on behalf of the UW System regents against former Chancellor Richard Wells and former Chief Business Officer Thomas Sonnleitner. The two are accused of illegally transferring more than $14.5 million in UW-Oshkosh Foundation and university money.
The DOJ suit was filed Jan. 18 after an investigation began in June.
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According to the suit totaling $14.8 million, the money allegedly went to fund five construction projects. They include two manure bio digesters, including one at an 8,000-head operation based in Fond Du Lac; an alumni center; a sports complex and a downtown Best Western hotel. Money from the hotel project has been repaid.
The state Constitution and UW System policies don’t allow a public entity to support a private organization. The foundation is a nonprofit.
Board members have mostly been close-mouthed about the prospect of bankruptcy except for state Rep. Amanda Stuck, D-Appleton. Stuck represents Appleton and Menasha and is also a new foundation board member after being appointed last fall.
Stuck said she learned about a potential bankruptcy and its ramifications at her first meeting.
“It could lead to the board dissolving; if that were to happen, that might be one thing that could happen. Of course it could also lead to the university possibly having to take over some of the projects the foundation is in charge of now.”
Stuck said she chose to speak about the possible bankruptcy filing because she feels an obligation to taxpayers.
The UW System and the Board of Regents are listed as complainants and are not commenting.
Of the meeting, Stuck said, “it was the first indication I’d heard at all of anything to this level happening with this board. It was the first time I really learned the depth of investigation that was going on.”
Besides declaring bankruptcy, Stuck said the foundation could try to raise the money itself or refinance its loans.
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