To the editor:
Rider’s administration continues to move forward with the plan to sell Westminster Choir College (WCC) to a struggling Chinese for-profit organization. They press ahead with this plan despite very little likelihood of achieving the stated goal of “strong sale proceeds to provide meaningful new program, facility investments in Lawrenceville,” according to the Guiding Principles for the sale of Westminster on the Rider website.
If the deal is completed with the maximum value identified on the term sheet, $40 million, Rider must relinquish approximately $20 million, which is the value of Westminsters endowment. Also, as the lawsuit by the Princeton Theological Seminary contends, Rider must give approximately $8 million of any sale proceeds to the Princeton Theological Seminary and repay the $8 million it has borrowed using the Princeton property as collateral. In addition to these costs, Rider’s administration has already paid almost $1 million to the previous Board of Trustees chairman Michael Kennedy’s former firm, PricewaterhouseCoopers, to negotiate this disastrous deal. Additional legal costs to defend lawsuits from the Princeton Theological Seminary and from Rider students, parents and alumni, members of the Rider community who are suing the school for fraud and malfeasance, have no doubt already run into the hundreds of thousands.
So, should a struggling Chinese firm manage to pay $40 million for Westminster — an unlikely prospect — and Rider is forced to pay the Princeton Theological Seminary and the bank the $16 million being demanded, then Rider would only be left with $3 million in proceeds from the transaction (40-20-16-1), an amount which could be substantially reduced by a settlement agreement with the other plaintiffs suing Rider over this sale. If, in the end, the Chinese firm negotiates the sale price of 20 percent to 40 percent below the ask price (a common occurrence in business transactions) then Rider would realize a net loss of between $5 million and $13 million.
President Gregory Dell’Omo likes to use the language of business to promote his rash actions concerning WCC and constantly implies there is a good business rationale for what he is doing, but in a well-run business, such a “deal” would lead to the wholesale removal of its architects.
— Arthur Taylor
Professor of information systems and supply chain management
Printed in the 3/28/18 issue.