Attorney General report blasts Rider

By Stephen Neukam

The New Jersey Attorney General’s (AG) office submitted its initial report on March 27 on the sale of Westminster Choir College (WCC) to the state Chancery Court and criticized Rider University for its lack of compliance in records requests.

The 35-page report, overseen by Acting Attorney General Jennifer Davenport, declined to make an immediate recommendation on whether the proposed transaction between Rider and Kaiwen Education should be approved. The report blamed this delay on Rider, writing that the university’s slow and incomplete production of documents hampered the AG’s ongoing review.

The AG sent the university 49 questions regarding the sale in June 2018 but did not receive a response from Rider until January 2019, nearly six months later, according to the report. That response, according to the AG, contained only partial answers to two of the questions.

The AG also requested meeting minutes of the Rider Trustees from the past three years. The report explained that the documents it received from this inquiry “were partially redacted, with many pages completely blacked-out and hundreds of pages of minutes withheld in their entirety.”

“Due to Rider’s six month delay in producing documents and eventual production of documents so heavily redacted as to hamper review, the Attorney General’s review of the sale is incomplete as of this date and the State is not yet able to make a recommendation,” said the report.

The AG requested more time from the court to continue to press Rider for documents and then make its recommendation on whether to approve the proposed $40 million transaction.

The report also scrutinized section 7.15 of the sale agreement between Rider and Kaiwen. The section gave Kaiwen the ability to discontinue the operation of WCC “if [Kaiwen] determines, in good faith, that such continued action would be substantially impracticable, economically infeasible or would substantially adversely affect WCC.”

“This ability to shutdown WCC at any time if financial circumstances warrant, makes no provision at all for the disposition of the income or the principle of the Endowment Fund,” said the report.

Under the current terms of the sale agreement, WCC’s $19 million endowment fund would be transferred to Kaiwen.

The university maintained on March 28 that it was not surprised with the findings of the AG report, citing the fact that the issues raised in the report are the subject of two separate lawsuits.

“The University will carefully review the letter and respond to the claims and issues through the court proceedings,” said Associate Vice President for University Marketing and Communications Kristine Brown in a written statement to The Rider News. “We look forward to the Superior Court of New Jersey resolving the issues in dispute after all the parties have had the opportunity to be heard.”

The Rider University Chapter of American Association of University Professors (AAUP) released a statement on its website on March 28 in which Professor of Music Composition and Theory at Westminster Choir College and AAUP officer Joel Phillips lauded the performance of acting AG Davenport.

“What struck me when reading acting AG Davenport’s 35-page analysis was its diligence and professionalism. She and her team did a terrific job — despite the fact their inquiries were stymied by Rider’s persistent stonewalling,” he said in the statement.

Bruce Afran, attorney for the Westminster Foundation, which is the alumni and faculty group working to stop the sale, interpreted the AG’s report as a grave blow to the sale in a released statement on the foundation’s website on March 28.

“The AG’s opinion filed yesterday with the New Jersey Superior Court makes any attempt to sell the renowned music college almost impossible,” said Afran.

President of the Westminster Foundation Constance Fee celebrated the AG’s report in the same statement.

“The opinion released today makes it almost certain that Westminster Choir College will remain open for future generations,” said Fee. “We expect that Rider University will see the hopelessness of its efforts to sell this school and will instead return to proper stewardship of one of the world’s great cultural institutions.”

The proceedings will continue into the foreseeable future. The report reveals that the AG sent another set of 45 questions to the university on March 22 and it expects that, after 60 to 90 days after it receives “satisfactory” responses, it will be able to make a recommendation to the court.

“The information provided should enable the State to resolve critical issues such as the fate of WCC’s Endowment Fund, Rider’s contemplated use of the sale proceeds, and the fair market value for the assets,” said the report. A court hearing is scheduled for April 15.

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