OSHKOSH – The bankrupt University of Wisconsin-Oshkosh Foundation is asking a judge to force the UW System to help cover its debt from what the state calls improperly funded real estate deals.
In a complaint filed Tuesday in federal bankruptcy court, the UW-Oshkosh Foundation argues that a series of loan guarantees signed by former UWO Chancellor Richard Wells and former Vice Chancellor Tom Sonnleitner commit the system to back the foundation’s debt on a string of showpiece building projects, including the Alumni Welcome and Conference Center.
The foundation filed for bankruptcy in August after becoming buried in debt on the center and four other building projects. The case could cost taxpayers millions if a judge agrees that Wells’ so-called “comfort letters” commit the system to that debt.
It’s likely that the case will turn on whether or not Wells had the legal authority, and if the foundation people knew that he didn’t have that authority, to obligate the taxpayers to back a private investment.
And this is just infuriating.
In its complaint, the foundation argues it would never have embarked on the building projects without the system’s backing, and banks wouldn’t have lent money for them.
So let’s think this through… the UWO Foundation is admitting that these were crappy investments that they wouldn’t have made with their own money – nor would any bank – and yet they were willing to move ahead with them if the taxpayers were willing to pick up the bill. That kind of reckless disregard for the taxpayers’ hard-earned money is far too common.