Repository: UIHistories Project: Board of Trustees Minutes - 1984 [PAGE 513]

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504

BOARD OF TRUSTEES

[March 15

EXECUTIVE SESSION President Forsyth, referring to Section T w o of the Open Meetings Act, stated: "A motion is now in order to hold an executive session to consider information regarding the appointment, employment, or dismissal of employees or officers, and to discuss pending, probable, or imminent litigation against or on behalf of the University and to discuss the acquisition of real property." T h e motion was made by Mr. Madden and approved unanimously. Litigation with Insurance Companies (1) In 1981, University auditors in Chicago discovered that University cashiers had been diverting funds from the Hospital patient accounts for almost four years. The University submitted claims to Federal Insurance Company and Indiana Insurance Company under blanket crime policies covering University funds lost through fraudulent or dishonest acts of University employees. Eventually the University filed a complaint in the Circuit Court of Cook County (Case No. 83-L-7889) seeking $397,035 from Federal Insurance Company and $29,210 from Indiana Insurance Company. The amount of the loss is not fully documented and is based in part on estimates by University auditors. (The insurance companies retained a firm of accountants to investigate the claim and upon recommendation of the accountants, have disputed the amount of the loss.) The two insurance companies have offered to settle the claims for $275,000, and there is reason to believe that in final negotiations they might agree to pay $300,000. Federal Insurance Company will not enter into final negotiations unless the University negotiators are authorized to commit the University to a settlement. Trial of the case would probably not result in the recovery of all that has been claimed in the complaint, and any amount recovered would be further reduced by substantial legal expenses. The vice president for business and finance and the university counsel have recommended that authority be granted to settle this matter for an amount not less than $275,000. I concur. O n motion of Mr. Howard, this recommendation was approved by the following vote: Aye, Mrs. Day, Dr. Donoghue, Mr. Forsyth, Mr. Halm, Mr. Howard, Mr. Logan, Mr. Madden, Mrs. Shepherd, Mr. Stone; no, none; absent, Governor Thompson. ( T h e student advisory vote was: Aye, Mr. Bolen, Mr. Milkint; no, none.) Appointment, University Director of Public Affairs President Ikenberry reviewed briefly the search process that led to the recommendation which appears on the March agenda. H e emphasized the outstanding credentials and background that made Mr. Coe a prime candidate for the position. Estate of Francoise A. Addington: Employment of Special Counsel M r . Costello, the university counsel, reported that the arrangement with outside counsel in this matter now provides for a conventional hourly fee, rather than the contingent fee previously discussed with the trustees. (One of the beneficiaries of the estate has disclaimed his interest under the