OSHKOSH, Wis. (AP) — The state of Wisconsin is considering a settlement with the creditors of financially-troubled UW-Oshkosh Foundation, according to University of Wisconsin System officials.
The private foundation doesn’t have enough cash to cover $14.5 million in debt for several real estate projects, the Milwaukee Journal Sentinel reported. Regent Michael Grebe said a potential agreement would protect UW System assets if the foundation can’t pay back its loans.
“We are being extremely cautious down this path, and if an agreement had been reached, we would have shared this information with the general public,” Grebe said. “We will continue to be transparent and forthcoming if there is information to share.”
Republican Sen. Steve Nass of Whitewater wrote a letter to UW System President Ray Cross saying the use of taxpayer money would amount to a bailout of the foundation’s debts and would set back efforts to rebuild trust between the university system and state lawmakers.
“Any effort by the UW System to ram through a bailout in the late stages of the state budget process would certainly cast a new light on the public relations campaign that was launched by the UW System on this matter in mid-January,” Nass wrote.
Nass said he hoped no one involved planned to hurry a bailout benefiting the private foundation, the banks and investors at the expense of students or taxpayers.
The Department of Justice is negotiating the settlement on behalf of the UW System and Board of Regents.
The department is investigating the real estate projects, which were the subject of a lawsuit the UW System filed in January against former Chancellor Richard Wells and his chief business officer, Thomas Sonnleitner. The lawsuit alleges they funneled $11 million in university money into the projects through the private foundation.
A UW spokeswoman said a settlement with the foundation would not affect the lawsuit.