Repository: UIHistories Project: Board of Trustees Minutes - 1980 [PAGE 435]

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424

BOARD OF TRUSTEES

[September 20

The university counsel has recommended that he be authorized to take such steps as are necessary or appropriate, including the employment of special counsel, to protect the interests of the University and Dr. El-Rahi in this matter, all in accordance with the University's risk management and self-insurance program. I concur.

The student advisory vote was: Aye, Mr. Sobotka, Miss Wyncott; no, none; absent, Mr. Grady. On motion of Mr. Neal, authority was given as recommended by the following vote: Aye, Dr. Donoghue, Mr. Forsyth, Mr. Hahn, Mr. Howard, Mr. Lenz, Mr. Neal, Mrs. Shepherd, Mr. Stone, Mr. Velasquez; no, none; absent, Governor Thompson.

Litigation Related to the Rice Foundation

(40) At the January and September 1978 meetings the Board of Trustees authorized participation by the University in litigation in order to protect the University's interest in the Rice Foundation. The principal issue involved is the validity of certain purported amendments to the bylaws of the Rice Foundation in 1974 which would put the control of the Rice Foundation in the University and four other institutions (Northwestern University, Loyola University of Chicago, RushPresbyterian-St. Luke's Medical Center, and Michael Reese Hospital and Medical Center). The Rice Foundation is the main beneficiary under the wills of Daniel and Ada Rice. The validity of the 1974 bylaw amendment was upheld in probate proceedings in DuPage County on February 2, 1978, in which it was declared that the five institutions were the rightful persons to control the Rice Foundation. T h e deposed directors and the Rice Foundation appealed from that order, which was then stayed by the Illinois Appellate Court pending resolution of the appeal. The matter has been briefed and argued, and we are now awaiting the decision of the Appellate Court. In a related action in the Circuit Court of Cook County the Rice Foundation and the deposed directors are seeking to invalidate the 1974 purported bylaw amendments and to have the court declare that the five institutions have no interest in the Rice Foundation. In other related litigation in Federal Court Daniel Rice, Jr., is seeking to set aside the will of his mother and to show undue influence in the execution of his father's will. The Rice Foundation is a defendant in the federal litigation, and a dispute has arisen between the deposed directors and the five institutions as to which of them is entitled to provide the representation of Rice Foundation as a defendant therein. The District Court has ruled that one firm seeking to represent Rice Foundation also represents one or more of the deposed directors and therefor has a conflict of interest which prevents it from providing the representation of Rice Foundation. T h a t matter is now on appeal before the Court of Appeals for the Seventh Circuit. In the meantime the Forest Preserve District of DuPage County has filed a condemnation proceeding in the Circuit Court of DuPage County (Case No. 78 ED 23) seeking to acquire by eminent domain substantial amounts of real estate which otherwise would pass to the Rice Foundation under the wills of Mr. and Mrs. Rice. The defendants in the condemnation proceeding include the University and Ronald W. Brady, whom the University has designated as its representative to the Rice Foundation. The university counsel recommends that he be authorized to take such steps as are necessary or appropriate in connection with the condemnation suit and related litigation, including the employment of special counsel, to protect the