🎓 When Presidents and Trustees Get Sued: Why Proactive Planning Is Now a Fiduciary Imperative in Higher Education

Brian Weinblatt, Ph.D.
Founder and Principal
Higher Ed Consolidation Solutions

Over the past year, a new and sobering risk has emerged for college and university trustees and senior leaders—and it’s no longer just financial. It’s legal and personal.

In multiple recent cases, students, alumni, faculty, and even former trustees have filed lawsuits against institutional leadership—alleging negligence, breach of fiduciary duty, and financial mismanagement in the wake of college closures or near-collapse. These suits are gaining momentum, media coverage, and in some cases, traction in the courts.

🔹 At University of the Arts in Philadelphia, students filed a class-action lawsuit in 2024, citing fraud and a lack of transparency around the school’s financial collapse.

🔹 In California, Golden Gate University School of Law faced a legal challenge from students and alumni demanding damages and a court-appointed receiver after the sudden shutdown of the law program.

🔹 Most notably, Saint Augustine’s University in North Carolina became the subject of multiple lawsuits—including one filed by alumni and former trustees directly naming the Board of Trustees for failure to act amid a deteriorating financial and accreditation situation.

These cases don’t just impact institutional reputation or future enrollment—they create direct liability for those at the top.

⚖️ The Growing Personal Risk for Trustees and Executives

Traditionally, trustees and executive leaders of nonprofit institutions have relied on Directors & Officers (D&O) insurance to protect them from legal claims related to their governance responsibilities. However, in today’s legal environment, that protection is no longer absolute.

Lawsuits alleging gross negligence, willful misconduct, or breach of fiduciary duty may not be covered—or the coverage may be quickly exhausted by mounting legal fees, settlements, and class action damages. In some cases, plaintiffs have explicitly sought personal accountability from individual trustees and presidents, opening the door to reputational damage, financial exposure, and lengthy court proceedings.

This is no longer a hypothetical risk. These lawsuits are real, and they are unfolding right now.

The expectations for governing boards and leadership teams are evolving. It is no longer enough to say, “We didn’t know how bad it was.” Today, leaders are expected to know—and to act.

🛡️ How HCS Helps Institutions Plan Before It’s Too Late

This is where Higher Ed Consolidation Solutions (HCS) comes in.

While HCS is nationally recognized for our work supporting institutions in mergers, affiliations, and other forms of strategic partnerships, we also provide a less visible—but increasingly vital—service: confidential contingency planning.

We work directly with boards and executive teams to quietly assess risk, explore partner pathways, and develop plans that can be deployed if necessary. These plans are built in private, executive-only settings and do not require immediate public disclosure. The goal is not to implement them—it’s to ensure the institution has options.

Because not having a plan in place is what leads to the kind of panic, harm, and liability we’ve seen in the headlines.

✅ Responsible Leadership Means Being Prepared

Preparing for financial distress is not an admission of failure—it’s a demonstration of prudent stewardship. In fact, creating contingency plans may be one of the most protective actions trustees can take, both for their institution and for their own fiduciary standing.

As recent lawsuits show, ignoring signs of financial strain or accreditation risk can have significant consequences—not just for the school, but for the individuals entrusted to lead it.

HCS helps institutions take action now—so they’re not forced into reactive decisions later. Whether your institution is in the early stages of exploring options or simply wants to be prepared for uncertainty, we’re here to help you build a roadmap.

📩 For a complimentary and confidential conversation, message or contact us online.

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