Who pays?

N

NewMexHawk

Well-Known Member
When the multi multi million dollar lawsuits hit PSU, who pays? How does something like this work? The Catholic Church had to sell property and close churches to help pay their lawsuits.

Does PSU have an insurance policy to cover lawsuits and are the payouts unlimited?

Does PSU's general fund pay the victims? That would mean the people of Pennsylvania is on the line for much of the payout. If so does that also mean that educational programs are cut to help pay the victims? If so, does that mean that less and less kids will go to PSU if they know programs are being cut to pay for child molester lawsuits? Does the University then ask donors and supporters who donate money to ante up more so that PSU can pay the lawsuits? Would they? Or is PSU looking at a situation where donors are going to shut their wallets?

Does the football program pay the victims? If so, how would that happen? Would PSU then ask donors and supporters to ante up more money to keep the program afloat?

If the football program is required to pay, will PSU have to shelve the program for a few years? How could/can they possibly field a team and carry on everyday activities (recruiting and such) if most of the program's income is going to pay child abuse victims?
 
First off, I don't think you can insure criminal behavior. Maybe you can but I've never seen that provision. Last I checked, there are statutory prohibitions of such things.

I would guess that most of the money would come out of the athletic coffers. Or maybe a Pedo Fee on students.
 
Lawyers always sue where the money is. If Sandusky goes bankrupt cause of his defense which is likely all the lawsuits will be directed to PSU, 2nd Mile and even Paterno.
 
FBletterman said:
Lawyers always sue where the money is. If Sandusky goes bankrupt cause of his defense which is likely all the lawsuits will be directed to PSU, 2nd Mile and even Paterno.
Click to expand...

Sandusky would be judgment-proof by the time these go to trial. Ped State and the 2nd Mile are going to be the two big pockets here.
 
ThunderHawk said:
First off, I don't think you can insure criminal behavior. Maybe you can but I've never seen that provision. Last I checked, there are statutory prohibitions of such things.

I would guess that most of the money would come out of the athletic coffers. Or maybe a Pedo Fee on students.
Click to expand...

Thunder, you are correct that you cannot insure against the direct criminal activities. However, I think the way the plaintiffs (victims) get around that is by suing Paterno, university president, university police, etc for not doing what was required of them. Then the university would like have some sort of general liability insurance policy to cover themselves for that type of situation. Now, will it be enough, I would highly doubt it.
And then I was wondering the same thing, where will the money come from to pay these cases? I'm sure the athletic department will have to pay a lot of it. That might mean cutting of certain sports, I would also guess the general university fund would have to pay. Which could mean increased tuition, higher taxes for taxpayers in the state, etc. But I really have no idea. It's pretty interesting to think about, it's will also be interesting to find out just how much they have to pay.
 
FBletterman said:
Lawyers always sue where the money is. If Sandusky goes bankrupt cause of his defense which is likely all the lawsuits will be directed to PSU, 2nd Mile and even Paterno.
Click to expand...

Right, Sandusky will likely have no money. And Paterno will be named in all these lawsuits. However, the University will likely by liable for his actions as an employee of the university at the time. I believe the term is Respondant Superior. In other words, Penn St is responsible for the actions of their employee, Paterno.
 
Igothawked said:
Thunder, you are correct that you cannot insure against the direct criminal activities. However, I think the way the plaintiffs (victims) get around that is by suing Paterno, university president, university police, etc for not doing what was required of them. Then the university would like have some sort of general liability insurance policy to cover themselves for that type of situation. Now, will it be enough, I would highly doubt it.
And then I was wondering the same thing, where will the money come from to pay these cases? I'm sure the athletic department will have to pay a lot of it. That might mean cutting of certain sports, I would also guess the general university fund would have to pay. Which could mean increased tuition, higher taxes for taxpayers in the state, etc. But I really have no idea. It's pretty interesting to think about, it's will also be interesting to find out just how much they have to pay.
Click to expand...

That is what the University will argue. Their insurer will fight that tooth and nail and claim that everything accrues from underlying criminal activity, not mere negligence.

Wow...can you imagine the backlash from taxpayers when they have to pony up because of this atrocity? But what choice are they gonna have? Ped State is the big dog state university. And they can't cut football, since that's the big revenue generator.

Tangled webs, y'all.
 
ThunderHawk said:
That is what the University will argue. Their insurer will fight that tooth and nail and claim that everything accrues from underlying criminal activity, not mere negligence.

Wow...can you imagine the backlash from taxpayers when they have to pony up because of this atrocity? But what choice are they gonna have? Ped State is the big dog state university. And they can't cut football, since that's the big revenue generator.

Tangled webs, y'all.
Click to expand...

Dude, no matter what PSU argues, I guarantee you this thing will shatter any limits on insurance policies they have. There's going to be a million issues about whether the guy was an agent of the university, the scope of any state sovereign immunity statutes and whether this was simple negligence or uninsurable gross negligence.

PSU had close to $1.4 billion in their endowment, which I assume will get tapped. I can't foresee the taxpayers getting hit for this, though.

Big Ten Conference - Wikipedia, the free encyclopedia
 
"PSU had close to $1.4 billion in their endowment, which I assume will get tapped. I can't foresee the taxpayers getting hit for this, though."

Wow, what does Iowa have in their endowment? Just curious.

I guess if I were an alumnus and the University to which I had donated a large sum of money for the betterment of the college I graduated from, used part of that money to pay of child abuse charges and lawsuits, I think my donations would stop immediately. Especially when it turns out that University officials covered up the scandal. That would pi$$ me off to no end. The University would see the last of my dollars.
 
11-15-2011 05:36 PMNewMexHawk
"PSU had close to $1.4 billion in their endowment, which I assume will get tapped. I can't foresee the taxpayers getting hit for this, though."

Wow, what does Iowa have in their endowment? Just curious.

I guess if I were an alumnus and the University to which I had donated a large sum of money for the betterment of the college I graduated from, used part of that money to pay of child abuse charges and lawsuits, I think my donations would stop immediately. Especially when it turns out that University officials covered up the scandal. That would pi$$ me off to no end. The University would see the last of my dollars.

One would think the collection plate in all of the Catholic dioceses would have dried up too ...
 
"One would think the collection plate in all of the Catholic dioceses would have dried up too ..."

Good point...

It will be interesting to see what happens...gonna get ugly though in Happy Valley.
 
""One would think the collection plate in all of the Catholic dioceses would have dried up too ..."

http://theweek.com/article/index/202388/catholics-in-crisis


I found this article about the Catholic Church and membership. The scandals have increased the number of people quitting the church, which would decrease funds coming into the church.

Now whether one can correlate that to PSU and their donors...who knows. But there is bound to be some sort of effect I would think.
 
NewMexHawk said:
""One would think the collection plate in all of the Catholic dioceses would have dried up too ..."

Catholics in crisis - The Week


I found this article about the Catholic Church and membership. The scandals have increased the number of people quitting the church, which would decrease funds coming into the church.

Now whether one can correlate that to PSU and their donors...who knows. But there is bound to be some sort of effect I would think.
Click to expand...

As the article points out, worldwide Church membership has been declining since the 60's for various reasons, and it offers no data on the effect of the scandals on membership.

However, US membership rose 15% between 1997 and 2007, from 60.3 million to 69.1 million, dropped slightly in 2008, and rose again in 2009 to 68.5 million.

Yearbook says U.S. Christian church membership rising - U.s. - Catholic Online

National Council of Churches USA
 
If they are stupid enough to have fund raisers to raise money for Sandusky's defense then they will surely keep contributing to their beloved Penn State. After all, "We Are Penn State!".
 
You must log in or register to reply here.

Latest posts

Share this page

Top