Repository: UIHistories Project: Board of Trustees Minutes - 1978 [PAGE 441]

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430

BOARD OF TRUSTEES

[September 21

any recovery by the plaintiffs. T w o appeals are pending from orders of the circuit court, imposing sanctions upon the architects and the contractor in connection with the discovery process. Another appeal is pending from an order of the circuit court, denying the University's motion to dismiss the counterclaim against the University insofar as it is based on a tort theory. Under orders entered by the trial court, the discovery period will close October 7, 1977, and the trial on the matter is scheduled for March 6, 1978. The amended complaint seeks damages from the defendants in the amount of $2,400,000. T h e counterclaim filed by the contractor against the University and the Foundation is in the amount of $841,000. The defendants deny liability in connection with all phases of the matter and assert that a substantial part of the restoration costs relates to factors other than the original specifications or execution of them, such as betterment over that originally contracted, failure to mitigate damages, and inadequate maintenance. Settlement negotiations have been conducted from time to time, involving all parties to the litigation. As a result, the entire litigation can now be resolved by the University and the Foundation agreeing to accept a settlement of not less than $930,000, to be contributed in varying amounts by each of the defendants. T h e proposed settlement contemplates general mutual releases by all parties, the dismissals of the complaint, counterclaim, third-party actions, and pending appeals, and the vitiation of the sanction orders. The settlement is deemed fair and reasonable in the light of the uncertainties of litigation and the substantial costs which would be required to complete discovery, trial, and pending appeals and to dispose of anticipated appeals of the final orders of the trial court. Settlement would also permit the return to regular duty of many University personnel who have been required to assist in the preparation and presentation of the case. At its meeting on July 16, 1975, the Board of Trustees requested the Foundation to begin the restoration and repair of the building up to a maximum borrowing and outlay by the Foundation of $2,000,000 for construction and other costs. Construction contracts amounting to approximately $1,600,000 have been awarded by the Foundation, and other expenses, including those related to the litigation, have been incurred. The proceeds from the proposed settlement would be applied by the Foundation against these restoration and other costs. T h e vice president for administration recommends that the proposed settlement be accepted by the University provided the same is also acceptable to the Foundation. 1 This recommendation has the support of the university counsel and special counsel. I concur. In the consideration of the recommendation, the committee received additional information on the legal aspects of this matter from the university counsel, Mr. Costello, and from the University's retained counsel, Mr. Jerome N. Groark, of the firm of Rooks, Pitts, Fullagar, and Poust. In addition, Mr. Ronald W. Brady, vice president for administration, presented further information concerning the financial and policy implications and additional steps contemplated in the restoration of the Krannert Center, should the proposed settlement be approved. (A copy of Mr. Brady's memorandum on this subject has been filed with the secretary of the board for record.)

1 On August 4, 1977, the Board of Directors of the University of Illinois Foundation approved an identical recommendation presented to them on that date.