Indiana Tech's law school will shut down after this semester, and Charlotte's cannot be long for this world. What will happen to their assets?
Soon after last autumn's announcement of Indiana Tech's impending closure, Eric Welch of Muncie, Indiana, demanded that that glorious Harvard on the Wabash (as I called it in a previous article) return the $20k that he had put up to endow a scholarship:
Unlike me, Welch is "very disappointed" by the shuttering of Indiana Tech. He established the scholarship in order "to help a law student with a well-rounded body of work, extracurricular activities and classroom studies". Generous though his donation indubitably was, it would not have helped a law student very much: a base of $20k invested at 5% would have supported a scholarship of only $1k per year, nothing like the $30k that Indiana Tech originally charged (but admittedly more than the $0 that Indiana Tech charged in its penultimate year). And I'm not convinced that a single deserving student could be found at Indiana Tech. Hell, only one member of the first year's graduating class passed the bar exam (and another got in on appeal).
Nonetheless, Welch endowed a scholarship in perpetuity, and he certainly didn't expect Indiana Tech to shut up shop in less than four years. His purpose has been thwarted by the very recipient of his largesse. Why shouldn't he get his money back?
Shambaugh Kast Beck & Williams LLP of Fort Wayne apparently donated $25k for a scholarship. Rather than seeking a refund, it plans to let Indiana Tech put the money towards some other program. But Welch doesn't want his money to support the bachelor's program in recreation therapy or the infamous PhD in global leadership (for which Fort Wayne is an internationally recognized center of excellence). And why should he? The university may have a legal claim to those funds but not a moral claim. It should give the money back to Welch or at least transfer it to a law school of his choice.
But the contention at Indiana Tech goes well beyond scholarships. Washington-based lawyer Christopher Mackaronis represents thirteen students and two faculty members of soon-to-be-defunct Indiana Tech. He is "looking into misrepresentation and fraud", as Indiana Tech allegedly duped students and staff alike into moving to Fort Wayne (not exactly the Côte d'Azur) and forgoing other opportunities.
And what about the art collection that Indiana Tech touted even before it opened? Is the university simply going to absorb that collection? Has the artwork already been sold off to make up part of the law skule's eight-figure losses?
These concerns apply in spades to the Charlotte School of Law. Although Harlotte doesn't have a parent university that can absorb its assets, it is owned by the notorious InfiLaw chain of scam schools. Does InfiLaw have the right to absorb any endowments that donors may have set up for scholarships at Harlotte? Would it be appropriate, morally or legally, to move those funds from Harlotte to Horrida Coastal or Arizona Scum Pit?
Two law schools are on their death bed, and others are likely to follow. We shall see what happens to their estates, so to speak. For now, anyone wishing to endow a scholarship should consider using an independent foundation rather than putting the law school in control of the funds.