bluebayou - my instincts align with yours. But Oberlin’s motivations are to delay, and the issue the bankruptcy attorney relates is whether the school simply could legally enter Chapter 11 (and get the stay which comes with bankruptcy). And yes, a bankruptcy court would challenge claims of a lack of liquidity re the endowment. Not sure if 11 would help them avoid payment in the end. Lots of assumptions. Oberlin secured a bond, and the bonding company must pay if Oberlin does not. The bankruptcy poster thinks it is possible that the bond matter could also be covered by a Chapter 11 and its stay. The practical issue is how this will impact professor pay and staffing - important to the school’s vitality. And of course admissions. And PR. A timely apology must look in hindsight pretty good right now.
Bankruptcy may also depend on how many assets Oberlin owns outright. The endowment may be restricted, but if it owns buildings and land outright, all that is attachable by the trustee in bankruptcy.
Maybe the bakery will take a couple buildings, right in the middle of campus, as payment.
I think they will have to pay the judgment out of the $937m endowment.
or the bakery could take over the food service building (adn land) as payment. The ultimate irony: bakery feeds teh kids who dissed them.
Oberlin’s endowment at the end of fiscal year 2021 was 1.273B (the $937M was from 2020 fiscal year end).
Oberlin has recorded a $32M dollar non-current liability for the Gibson’s judgment. Insurance may also cover this judgment, but I am not sure the details of that.
The students speaking out against Oberlin was protected as free speech, and not at issue in any of the lawsuits.
Never said or implied it was anything other than free speech. But that free speech also dissed the bakery and its owners (and yes, unrelated to the law suit)
Agreed, which was based on facebook posts (and other known behaviors) made by one of the Gibsons: Judge Unseals Facebook Posts in Gibson’s Case – The Oberlin Review
Just to be clear, I do not support the students who committed the crime leading to the protests which led to the lawsuit.
Yes, Ohio requires a bond for any appeal, as noted here: Ohio Commercial Litigation: The high cost of losing - When post-judgment bonds are required pending resolution of an appeal - Finney Law Firm
There is zero chance that the surety company has failed to take adequate steps to protect itself. That will include filing liens on various Oberlin assets (probably land and buildings, but possibly some parts of the endowment). Filing for bankruptcy would not allow the college to avoid paying secured creditors (ie the surety company) and is extremely unlikely as it would just rack up more legal fees.
I don’t think this is about whether the bond company is protected. I am sure they are. They have security/collateral and a highly enforceable indemnity. It is about what Oberlin might do to delay by any means necessary paying the plaintiffs. The college wants to make it difficult as possible to collect, and I don’t think incurring legal fees would stop them. It is clear they wish to punish the Gibsons as much as possible. Again, bankruptcy is to me insane but others have dialed in as to the desperate steps the college administration might take. And I can see where the bankruptcy expert who thinks they can get through the initial gates of a Chapter 11 could envision the school doing so, irrespective of the fact it would have no salutary impact other than delay. Perhaps I have undue skepticism as to whether the administration is rational and will simply pay without further difficulty.
I think the Board of Trustees is more likely to be calling the shots than the administrators.
Delay (through appeals or bankruptcy) is a method often used in big judgements hoping for a settlement for half, but either the Gibsons didn’t care about money and just want Oberlin to suffer or Oberlin is so far out on a limb that they won’t settle for anything. I bet the Gibsons would have settled for $20M but Oberlin just couldn’t admit they were losing.
I wonder what the insurance policy covers and if there was an offer to settle for the full amount of the policy. Usually if there was anything above that offer amount is the responsibility of Oberlin.
I have to think that the Gibsons would have happily gone away for $10M or less during the trial, and after the initial judgement would have for $20M. Heck, firing the Dean of Students, getting the Gibsons reinstated to their dining contract, a heartfelt apology, and a couple million may well have done it up until the trial started.
There were multiple exit points, and Oberlin kept choosing to not take them. I think there may have been multiple insurance companies involved, which complicated the ability to make a settlement. But still, this case and the way it was litigated was an unmitigated disaster. It was a case of extreme hubris and out of touch behavior, both from the administrators and the board of trustees. Any of them that were ok with letting this get so far should be replaced.
I think Chapter 11 has no chance of being successful. But I think any worthwhile lawyer could have told them that about their appeal too. This was a fact dependent case, there really was no appellate issue to litigate. This kind of case is pretty much done at trial, no one is really disputing what the law is, and disputing that they crossed the line is not an appellate issue, the appellate court will defer to the trial court on that issue. So it was pretty much a guaranteed loser from day 1. They just kept banging the free speech drum, and the courts kept essentially saying that their arguments and those of the amicus briefs were irrelevant to the legal issue at hand.
The final outcome will not change. The only thing they still have control over is how quickly they can get this over with and out of the news cycle. When my daughter was looking at colleges, this was an easy way to knock Oberlin off of the list. They have done massive damage to their brand. Hopefully they will follow the first rule of getting out of a hole. Stop digging. Pay the Gibsons, preferably in cash immediately, and try very hard to not ever speak of this again so the world (and potential customers, i.e. HS students and more importantly their check writing parents) forget about it.
But that’s my point. Typically lien holders have the right to execute on the collateral in the event of a bankruptcy filing. Do they want the bond company to repossess the college? That seems … bad
Here’s an article by the Gibsons:
Sad. I can confirm that new students are told not to go to Gibson’s. As I said earlier in this thread, I hope Oberlin stops with the appeals and pays what they owe, so all affected parties can move on.
Completely agree and or wish they would finally publicly acknowledge that mistakes were made in a rush to judgement.
That is outrageous and depending on who and what is said could be grounds for further liability. Maybe a creative way to pay the judgement if the judgement bond is insufficient and a payment plan is required is to give Oberlin “credit” for a percent of Gibson sales over “X”. Oberlin then is incented to give business to Gibson and to encourage students and families to shop there vs being the vindictive jerks that they are currently being portrayed as.
I agree with all of that. My understanding is that some Oberlin ordering from Gibson’s has returned but I doubt it’s anything like it was prior to the incident. Not to mention most kids won’t go there.
Also, their baked goods and food like breakfast sandwiches are good. Lastly, every time I have been in town, I have seen African-American townspeople at the store.
Nobody has told my new student or his friends not to go to Gibson’s. In fact, Gibson’s accepts their “ObieDollars” which is incentive to patronize Gibson’s.