The University of Louisville is considering suing its own foundation in the wake of a damaging audit and months of talk about recouping misspent money, according to leaders at the U of L Foundation. Earl Reed III, chairman of a U of L Foundation subcommittee, said in an affidavit provided to the Kentucky Center for Investigative Reporting that the foundation’s threat of being sued by U of L “is substantial” but could be avoided if the two entities reach agreeable terms.
The foundation created the affidavit in response to an open meetings complaint from KyCIR about two executive session meetings held on Oct. 26. The complaint argued that state law requires a specific and substantial threat of a lawsuit to warrant a secret meeting. Interim U of L Foundation executive director Keith Sherman told KyCIR that the closed sessions were legal and proper because board members were discussing a substantial and specific legal threat from U of L.
The affidavit marks the first confirmation of a specific lawsuit possibility after months of vague discussion about recovering millions lost from the foundation’s endowment.