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Business Briefs

Short news articles based on research surveys and peers’ business experiences that can benefit institutions

ENVIRONMENTAL COMPLIANCE
Perseverance Pays for Asbestos Class-Action Suit

Signs of an Economic Recovery

1.3%

The rise in consumer spending in August 2009, the largest monthly increase since October 2001.

598K

The number of new housing units (homes and apartment buildings) under construction in August 2009, the highest number of the calendar year.  

$2T

The total increase in net wealth of American households from April to June 2009, the first quarterly increase in wealth in two years.

+21.7%

The percentage change in value of stock holdings of American households in the second calendar quarter of 2009.

Sources: Various reports from the Federal Reserve, the U.S. Department of Commerce, and the Washington Post.

Back when Ronald Reagan was president and gasoline cost 89 cents per gallon, a group of institutions filed a class action suit in federal court. Supported by the American Council on Education and NACUBO, the group sought to recover asbestos abatement costs for colleges and universities across the country. The suit, known as Central Wesleyan v. W. R. Grace & Co., et al., named as defendants more than 50 companies that manufactured, sold, or distributed asbestos-containing building products used on campuses.

Now, 22 years later, checks totaling more than $62 million were mailed in late October to the 410 institutions that successfully filed claims for reimbursement. This represents 15 percent of the $415 million in eligible abatement expenses documented in the suit. Possible future settlements may result in a second round of payments to eligible institutions sometime in 2010 or 2011.

A Concerted Effort

The positive outcome of the suit is an example of a truly effective community effort. Many players deserve credit for its success, including:

  • Southern Wesleyan University, Central, South Carolina, which agreed to serve as the named class representative after the standing of two public institutions in South Carolina (Clemson University and the College of Charleston) was questioned.
  • Edward Westbrook, now with Richardson, Patrick, Westbrook & Brickman LLP, who served ably as lead attorney for the class through multiyear fights over class certification, six bankruptcy proceedings, and negotiated settlements with more than 30 defendants.
  • Forty colleges and universities that provided seed money to hire attorneys and file the suit.
  • Numerous colleges and universities that stepped forward to prove that asbestos-containing products of certain manufacturers were present on campuses, thus supporting claims in various bankruptcy settlements.
  • Members of the court-appointed advisory committee who consulted with and advised class counsel through the years and were charged by the court with developing and implementing the claims guidelines. Institutional representatives are Martin Atcheson, senior vice president for finance, Southern Wesleyan University; Beckman Rich, associate general counsel, Rutgers University, New Jersey; Howard Ende, of counsel, Drinker Biddle & Reath LLP (formerly with Princeton University, Princeton, New Jersey); Tom Fenner, deputy general counsel, Stanford University, Stanford, California; Beverly Ledbetter, vice president and general counsel, Brown University, Providence, Rhode Island; Frederick Savage, deputy general counsel, Johns Hopkins University, Baltimore; Henry Tisdale, president, Claflin University, Orangeburg, South Carolina; and Mitchell Zais, president, Newberry College, Newberry, South Carolina. Sheldon Steinbach, former general counsel for the American Council on Education, now senior counsel with Dow Lohnes PLLC, and Anne Gross, vice president, regulatory affairs, NACUBO, also serve on the advisory committee.

The window for filing claims was open from Sept. 15, 2005, until March 15, 2006. The court allowed some late claims to be accepted in early 2008, but no additional claims will be accepted. The class continues to press its claims in several remaining bankruptcies. Class counsel, Ed Westbrook, congratulated the college community for its steadfast support over the years: “For more than two decades, the colleges stood with us through every onslaught against the class and years of intricate bankruptcy proceedings. We could not have hoped for a more dedicated group of clients.”

NACUBO CONTACT Anne Gross, vice president, regulatory affairs, 202.861.2544

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SPOTLIGHT: COMMUNITY COLLEGES
Create Culturally Aware, Interactive Leaders

As the Community College of Philadelphia celebrates more than 40 years as a major institution of higher education, we realize that some of the key elements of the college's success will not be as effective in the years to come. Decreased funding, rising enrollment demands, changes in operational context, and an anticipated flurry of retirements are factors that demand leaders who can meet tough challenges in an era of rapid change.

To train future leaders in the skills to support our college's mission and values around accessibility and affordability of quality education, we initiated in 2002 the Leadership Institute (LI). In the eight years of the program, a number of LI graduates have earned promotions as well as placement in leadership positions.

Gaining From Group Dynamics

A competitive selection process for LI participation results in a mix of staff, faculty, and administration from diverse units of the institution. The goal of inclusion is twofold: (1) given the operational complexity of public community colleges, we want the various units within the college to know and understand each other's functions and ensure that their employees interact effectively, and (2) we want the program to increase each individual's understanding of our organizational culture and inclination to network with other colleagues.

The office of academic affairs funds LI at a cost of $11,000 per year (not including facilitators' time). Facilitators are administrators who are selected to serve during regular work hours. The program is aimed at staff who see themselves in leadership positions in the future or who are motivated to upgrade their skills for the positions they currently hold. A committee, including the vice president of academic affairs and three former institute graduates (representing staff, faculty, and administrators), reviews and ranks applications using established criteria. In the seven completed years of the program, the number of participants has ranged from 8 to 20 per institute, with a 94 percent completion rate.

Nourishing Open Minds

In an intense schedule from August through April, the LI class learns about the internal and external issues affecting the college. More than 38 hours of presentations and in-depth workshops cover topics such as diversity, fiscal management, leadership styles, and grant writing. Other elements of the program include interactive presentations with local, state, and national educators, and team projects, such as developing a tutorial for students on how to use the student Web portal or creating a video to help students navigate the library and all its resources. (For more information about the Leadership Institute, visit their Web site.)

More than 50 percent of the first two cohorts of LI graduates have earned promotions or placement in leadership positions. More than a third of the participants in the first seven classes have done so. Feedback from employees who have experienced the immersion in leadership skills indicates that the program has had a transformative effect on them in terms of supporting the college's core values of integrity, academic excellence, diversity, commitment to teaching and learning, communication, and respect. As one graduate said: “The most valuable elements of the LI project were learning how to build effective relationships and learning to think globally about how leaders impact the community college environment.”

SUBMITTED BY Judith Gay, vice president for academic affairs, and Susan Tobia, executive assistant to the vice president for academic affairs, Community College of Philadelphia

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